Identifying Agglomeration Spillovers: Evidence from Winners and Losers of Large Plant Openings
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Greenstone_Identifying agglomeration.pdf
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744.35 KB
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Author(s)
Greenstone, Michael
Hornbeck, Richard
Moretti, Enrico
Date Issued
June 2010
Journal
Journal of Political Economy
Publisher
University of Chicago Press
Citation
Greenstone, Michael, Richard Hornbeck, and Enrico Moretti. “Identifying Agglomeration Spillovers: Evidence from Winners and Losers of Large Plant Openings.” The Journal of Political Economy 118.3 (2010): 536-598.
Version
Author's final manuscript
Abstract
We quantify agglomeration spillovers by comparing changes in total factor productivity (TFP) among incumbent plants in “winning” counties that attracted a large manufacturing plant and “losing” counties that were the new plant's runner‐up choice. Winning and losing counties have similar trends in TFP prior to the new plant opening. Five years after the opening, incumbent plants' TFP is 12 percent higher in winning counties. This productivity spillover is larger for plants sharing similar labor and technology pools with the new plant. Consistent with spatial equilibrium models, labor costs increase in winning counties, indicating that profits ultimately increase less than productivity.
MIT Department
Massachusetts Institute of Technology. Department of Economics
Terms of Use
Creative Commons Attribution-Noncommercial-Share Alike 3.0
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DOI of Published Version
https://doi.org/10.1086/653714
