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Intercity interactions: evidence from the US


  • Andrea R. Lamorgese

    (Banca d'Italia)

  • Gianmarco I.P. Ottaviano



Using 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 e®ect of pecuniary externalities on productivity growth; (ii) we disentangle such e®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 di®erent distance measures. Our estimates suggest that pecuniary externalities and other kinds of local interactions coexist, that their e®ect on productivity growth is decreasing with distance and that it depends on inter-city diversity and the pattern of local specialisation

Suggested Citation

  • Andrea R. Lamorgese & Gianmarco I.P. Ottaviano, 2006. "Intercity interactions: evidence from the US," 2006 Meeting Papers 667, Society for Economic Dynamics.
  • Handle: RePEc:red:sed006:667

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    References listed on IDEAS

    1. Domenico Giannone & Michele Lenza, 2010. "The Feldstein-Horioka Fact," NBER International Seminar on Macroeconomics, University of Chicago Press, vol. 6(1), pages 103-117.
      • Domenico Giannone & Michele Lenza, 2010. "The Feldstein-Horioka Fact," NBER Chapters,in: NBER International Seminar on Macroeconomics 2009, pages 103-117 National Bureau of Economic Research, Inc.
    2. Forni, Mario & Lippi, Marco, 1997. "Aggregation and the Microfoundations of Dynamic Macroeconomics," OUP Catalogue, Oxford University Press, number 9780198288008.
    3. Mario Forni & Marc Hallin & Marco Lippi & Lucrezia Reichlin, 2000. "The Generalized Dynamic-Factor Model: Identification And Estimation," The Review of Economics and Statistics, MIT Press, vol. 82(4), pages 540-554, November.
    4. Forni, Mario & Reichlin, Lucrezia, 1995. "Let's Get Real: A Dynamic Factor Analytical Approach to Disaggregated Business Cycle," CEPR Discussion Papers 1244, C.E.P.R. Discussion Papers.
    5. Timothy G. Conley & Bill Dupor, 2003. "A Spatial Analysis of Sectoral Complementarity," Journal of Political Economy, University of Chicago Press, vol. 111(2), pages 311-352, April.
    6. Bartelsman, Eric J & Caballero, Ricardo J & Lyons, Richard K, 1994. "Customer- and Supplier-Driven Externalities," American Economic Review, American Economic Association, vol. 84(4), pages 1075-1084, September.
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    Cited by:

    1. Lööf , Hans & Johansson, Börje, 2011. "Innovation, Metropolitan and Productivity," Working Paper Series in Economics and Institutions of Innovation 260, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.

    More about this item


    customer and supplier driven externalities; spatial autoregressive models; dynamic factors model;

    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

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