Intercity interactions: evidence from the US
AbstractUsing national level input-output matrices, we propose a strategy to identify pecuniary externalities operating through the markets for intermediate goods at the local level. Then, controlling for common shocks in a spatial econometric framework, (i) we estimate the eÂ®ect of pecuniary externalities on productivity growth; (ii) we disentangle such eÂ®ect from the one of other local interactions (i.e. knowledge or other face-to-face spillovers) and that of local characteristics; (iii) we evaluate the scope of operating of all kind of externalities using diÂ®erent distance measures. Our estimates suggest that pecuniary externalities and other kinds of local interactions coexist, that their eÂ®ect on productivity growth is decreasing with distance and that it depends on inter-city diversity and the pattern of local specialisation
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Bibliographic InfoPaper provided by Society for Economic Dynamics in its series 2006 Meeting Papers with number 667.
Date of creation: 03 Dec 2006
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Postal: Society for Economic Dynamics Christian Zimmermann Economic Research Federal Reserve Bank of St. Louis PO Box 442 St. Louis MO 63166-0442 USA
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customer and supplier driven externalities; spatial autoregressive models; dynamic factors model;
Find related papers by JEL classification:
- R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
- R15 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Econometric and Input-Output Models; Other Methods
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-01-13 (All new papers)
- NEP-GEO-2007-01-13 (Economic Geography)
- NEP-URE-2007-01-13 (Urban & Real Estate Economics)
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