American Economic Review Vol. 114 No. 4 2024

Local Productivity Spillovers

Nathaniel Baum-Snow¹; Nicolas Gendron-Carrier²; Ronni Pavan³

¹ Rotman School of Management, University of Toronto (email: ) · ² Department of Economics, McGill University (email: ) · ³ Department of Economics, University of Rochester (email: )

Abstract

Using Canadian administrative data, this paper presents evidence of revenue and productivity spillovers across firms at fine spatial scales. Accounting for the endogenous sorting of firms across space, we estimate an average elasticity of firm revenue and productivity with respect to the average quality of other firms within 75 meters of 0.024. We find scant evidence that the average firm benefits from being surrounded by a greater amount of economic activity at this spatial scale. Sorting of higher-quality firms into more productive locations and higher average and aggregate quality peer groups is salient in the data.

DOI

10.1257/aer.20211589

Volume

114

Issue

4

Pages

1030-1069

Language

en

Sources

crossref bibtex:phds-export.bib openalex

Cite

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