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Vertical Industry Relations, Spillovers, And Productivity: Evidence From Chilean Plants

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  • Ricardo A. López
  • Jens Südekum

Abstract

We use disaggregated data on Chilean plants, and the Chilean input-output table to examine the impact of agglomeration spillovers on total factor productivity (TFP). In common with previous studies, we find evidence for intraindustry spillovers, but none for general cross-industry spillovers. This picture changes when we take vertical industry relations into account. There are important productivity spillovers from plants in upstream industries. Interestingly, a similar effect cannot be found from plants in downstream industries. The number of plants in these sectors has no effect on plant-level TFP, just as the number of plants in other industries that are neither important upstream suppliers nor downstream customers also has no effect. Copyright (c) 2009, Wiley Periodicals, Inc.

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Bibliographic Info

Article provided by Wiley Blackwell in its journal Journal of Regional Science.

Volume (Year): 49 (2009)
Issue (Month): 4 ()
Pages: 721-747

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Handle: RePEc:bla:jregsc:v:49:y:2009:i:4:p:721-747

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  1. Duranton, Gilles & Puga, Diego, 2003. "Microfoundations of Urban Agglomeration Economies," CEPR Discussion Papers 4062, C.E.P.R. Discussion Papers.
  2. Mary Amiti & Lisa Ann Cameron, 2004. "Economic Geography and Wages," IMF Working Papers 04/79, International Monetary Fund.
  3. Henderson, Vernon & Kuncoro, Ari & Turner, Matt, 1995. "Industrial Development in Cities," Journal of Political Economy, University of Chicago Press, vol. 103(5), pages 1067-90, October.
  4. Thomas J. Holmes, 1995. "Localization of industry and vertical disintegration," Staff Report 190, Federal Reserve Bank of Minneapolis.
  5. Stuart S. Rosenthal & William C. Strange, 2003. "Geography, Industrial Organization, and Agglomeration," The Review of Economics and Statistics, MIT Press, vol. 85(2), pages 377-393, May.
  6. Roberto Alvarez & Ricardo López, 2005. "Exporting and performance: evidence from Chilean plants," Canadian Journal of Economics, Canadian Economics Association, vol. 38(4), pages 1384-1400, November.
  7. Rosenthal, Stuart S. & Strange, William C., 2004. "Evidence on the nature and sources of agglomeration economies," Handbook of Regional and Urban Economics, in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 49, pages 2119-2171 Elsevier.
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