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Productivity, Place, and Plants

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  • Benjamin Schoefer
  • Oren Ziv

Abstract

Why do cities differ so much in productivity? A long literature has sought out systematic sources, such as inherent productivity advantages, market access, agglomeration forces, or sorting. We document that up to three quarters of the measured regional productivity dispersion is spurious, reflecting the “luck of the draw” of finite counts of idiosyncratically heterogeneous plants that happen to operate in a given location. The patterns are even more pronounced for new plants, hold for alternative productivity measures, and broadly extend to European countries. This large role for individual plants suggests a smaller role for places in driving regional differences.

Suggested Citation

  • Benjamin Schoefer & Oren Ziv, 2021. "Productivity, Place, and Plants," NBER Working Papers 28772, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:28772
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    Cited by:

    1. Jonathan I. Dingel & Felix Tintelnot, 2020. "Spatial Economics for Granular Settings," NBER Working Papers 27287, National Bureau of Economic Research, Inc.

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    More about this item

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
    • R0 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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