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Vertical Industry Relations, Spillovers and Productivity: Evidence from Chilean Plants

Ricardo A. López

Brandeis International Business School

Jens Suedekum

University of Duisburg-Essen; Institute for the Study of Labor (IZA)

September 11, 2007

CAEPR Working Paper No. 2007-016
IZA Discussion Paper No. 3047

We use disaggregated data on Chilean plants, and the Chilean input-output table to examine the impact of agglomeration spillovers on total factor productivity (TFP). In common with previous studies, we find evidence of intra-industry spillovers, but no evidence of cross-industry spillovers in general. This picture changes, however, when we take vertical industry relations into account. We find important productivity spillover effects from plants in upstream industries. Interestingly, a similar effect cannot be found from plants in downstream industries. The number of plants in these sectors has no effect on firm level TFP, just as the number of plants in other industries that are neither important upstream suppliers nor downstream customers also has no effect. Agglomeration effects are stronger for small than for large plants.

Number of Pages in PDF File: 28

Keywords: vertical linkages, agglomeration, productivity, Chile

JEL Classification: R11, R15, O18, O54

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Date posted: September 11, 2007  

Suggested Citation

López, Ricardo A. and Suedekum, Jens, Vertical Industry Relations, Spillovers and Productivity: Evidence from Chilean Plants (September 11, 2007). CAEPR Working Paper No. 2007-016; IZA Discussion Paper No. 3047. Available at SSRN: http://ssrn.com/abstract=1013622

Contact Information

Ricardo A. Lopez (Contact Author)
Brandeis International Business School ( email )
Mailstop 32
Waltham, MA 02454-9110
United States
HOME PAGE: http://people.brandeis.edu/~rlopez/
Jens Südekum
University of Duisburg-Essen ( email )
Lotharstrasse 1
Duisburg, 47048
Institute for the Study of Labor (IZA)
P.O. Box 7240
Bonn, D-53072
Feedback to SSRN

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