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Industry Linkages from Joint Production

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  • Xiang Ding

Abstract

I develop a theory of joint production to quantify aggregate economies of scope. In US manufacturing data, increased export demand in one industry raises a firm’s sales in its other industries that share knowledge inputs like R&D and software. I estimate that knowledge inputs contribute to economies of scope through their scalability and partial non-rivalry within the firm. On average a 10 percent increase in output in one industry lowers prices in other industries by 0.4 percent. Such economies of scope manifest disproportionately among knowledge proximate industries and imply large spillover impacts of recent US-China trade policy on producer prices.

Suggested Citation

  • Xiang Ding, 2023. "Industry Linkages from Joint Production," Working Papers 23-02, Center for Economic Studies, U.S. Census Bureau.
    • Handle: RePEc:cen:wpaper:23-02
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    File URL: https://www2.census.gov/library/working-papers/2023/adrm/ces/CES-WP-23-02.pdf
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