Intra-Firm Spillovers? The Stock and Flow Effects of Collocation

35 Pages Posted: 3 Jan 2015 Last revised: 30 May 2015

See all articles by Evan Rawley

Evan Rawley

University of Minnesota - Twin Cities - Carlson School of Management

Robert Seamans

New York University (NYU) - Leonard N. Stern School of Business

Multiple version iconThere are 2 versions of this paper

Date Written: May 28, 2015

Abstract

We study how intra-firm collocation — geographic clustering of business establishments owned by the same parent company — influences performance, decomposing the collocation effect into stocks and flows to learn about the mechanisms behind intra-firm agglomeration. Using Census micro data on the full population of U.S. hotels and restaurants from 1977-2007, we find that doubling the intensity of intra-firm collocation is associated with a productivity increase of about 2%. Further analyses reveal that a significant component of the productivity gains are attributable to stock effects, in the sense that productivity effects persist after an establishment ceases to be collocated. The results are consistent with the idea that proximity to other establishments owned by the same parent firm facilitates knowledge transfer, which has broad implications for firm strategy.

Keywords: agglomeration, collocation, performance, spillovers, hotels, restaurants

JEL Classification: D24, L23, L83, R11

Suggested Citation

Rawley, Evan and Seamans, Robert, Intra-Firm Spillovers? The Stock and Flow Effects of Collocation (May 28, 2015). Columbia Business School Research Paper No. 15-2, Available at SSRN: https://ssrn.com/abstract=2544518 or http://dx.doi.org/10.2139/ssrn.2544518

Evan Rawley

University of Minnesota - Twin Cities - Carlson School of Management ( email )

19th Avenue South
Minneapolis, MN 55455
United States

Robert Seamans (Contact Author)

New York University (NYU) - Leonard N. Stern School of Business ( email )

44 West 4th Street
Suite 9-160
New York, NY NY 10012
United States

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