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External Economies at the Firm Level: Evidence from Swedish Manufacturing

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  • Lindström, Tomas

    (Monetary Policy Department, Central Bank of Sweden)

Abstract

Using the method of Caballero and Lyons (1990, 1992), I examine detailed Swedish manufacturing firm-level data on output and factor inputs from 1979 through 1994. Panel regressions show that an increase in aggregate output and inputs appears to raise individual firms’ production beyond private marginal returns, a result consistent with external economies. However, while considering potential specification difficulties, this paper shows that a model in which random shifts in technology drive the business cycle statistically outperforms the Caballero-Lyons model. This finding suggests that high-frequency random shifts in technology are more important for movements in firms’ productivity than are external economies.

Suggested Citation

  • Lindström, Tomas, 1999. "External Economies at the Firm Level: Evidence from Swedish Manufacturing," Working Paper Series 89, Sveriges Riksbank (Central Bank of Sweden).
    • Handle: RePEc:hhs:rbnkwp:0089
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    Cited by:

    1. Giuseppe Medda & Claudio Piga, 2014. "Technological spillovers and productivity in Italian manufacturing firms," Journal of Productivity Analysis, Springer, vol. 41(3), pages 419-434, June.
    2. G Medda & C. Piga, 2004. "R&S e spillover industriali: un'analisi sulle imprese italiane," Working Paper CRENoS 200406, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.

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    More about this item

    Keywords

    business fluctuations; economic growth; increasing returns; manufacturing;
    All these keywords.

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General

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