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Social Learning among Urban Manufacturing Firms: Energy-Efficient Motors in Bangladesh

Author

Listed:
  • Ritam Chaurey
  • Gaurav Nayyar
  • Siddharth Sharma
  • Eric Verhoogen

Abstract

Knowledge spillovers among firms are widely viewed as a key driver of agglomeration and growth, but are difficult to estimate cleanly. We randomly allocated an energy-efficient motor --- a “servo'” motor --- among leather-goods firms in Dhaka, Bangladesh, and tracked adoption, information flows, beliefs about energy savings, and other variables. We use the difference between actual exposure and expected exposure (from simulated randomization draws) to identify the effect of exposure. We find a robust positive effect of exposure to treated neighbors within a small geographic area (500 meters in our baseline specification) on information flows and adoption. A marginal value of public funds (MVPF) calculation taking learning spillovers into account yields a significantly larger value than one considering only treated firms and suggests that adoption subsidies would be a cost-effective policy intervention.

Suggested Citation

  • Ritam Chaurey & Gaurav Nayyar & Siddharth Sharma & Eric Verhoogen, 2025. "Social Learning among Urban Manufacturing Firms: Energy-Efficient Motors in Bangladesh," NBER Working Papers 34296, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:34296
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    More about this item

    JEL classification:

    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
    • L67 - Industrial Organization - - Industry Studies: Manufacturing - - - Other Consumer Nondurables: Clothing, Textiles, Shoes, and Leather Goods; Household Goods; Sports Equipment
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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