Download this Paper Open PDF in Browser

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

28 Pages Posted: 11 Sep 2007  

Ricardo A. López

Brandeis International Business School

Jens Suedekum

Heinrich-Heine-University Duesseldorf, Duesseldorf Institute for Competition Economics (DICE); Centre for Economic Policy Research (CEPR); CESifo (Center for Economic Studies and Ifo Institute); Institute for the Study of Labor (IZA)

Date Written: September 11, 2007

Abstract

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.

Keywords: vertical linkages, agglomeration, productivity, Chile

JEL Classification: R11, R15, O18, O54

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: https://ssrn.com/abstract=1013622

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

Heinrich-Heine-University Duesseldorf, Duesseldorf Institute for Competition Economics (DICE) ( email )

Universitaetsstr. 1
Duesseldorf, NRW 40225
Germany

Centre for Economic Policy Research (CEPR) ( email )

77 Bastwick Street
London, EC1V 3PZ
United Kingdom

CESifo (Center for Economic Studies and Ifo Institute) ( email )

Poschinger Str. 5
Munich, DE-81679
Germany

Institute for the Study of Labor (IZA)

P.O. Box 7240
Bonn, D-53072
Germany

Paper statistics

Downloads
140
Rank
174,420
Abstract Views
896