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

36 Pages Posted: 4 Mar 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: January 1, 2015

Abstract

We examine the impact of collocation on local within-firm performance, or intra-firm spillovers, by decomposing spillovers into one-time stock and recurring flow effects. Stock effects include one-time learning effects. Flow effects include ongoing resource sharing as well as cannibalization. Using data on the population of U.S. hotels and restaurants from 1977-2007, we exploit changes in the number of collocated establishments owned by the same firm to estimate the relative importance of stock and flow benefits. We find that collocation improves the productivity of new and existing establishments by 1-2%, even when correcting for endogenous sorting into collocation. The results, in conjunction with our field work, suggest that collocation generally facilitates the transfer of knowledge within the firm, but that flow effects of collocation are more sensitive to the broader economic environment.

Suggested Citation

Rawley, Evan and Seamans, Robert, Intra-Firm Spillovers? The Stock and Flow Effects of Collocation (January 1, 2015). US Census Bureau Center for Economic Studies Paper No. CES-WP-15-01; Columbia Business School Research Paper No. 15-26. Available at SSRN: https://ssrn.com/abstract=2573191 or http://dx.doi.org/10.2139/ssrn.2573191

Evan Rawley (Contact Author)

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

19th Avenue South
Minneapolis, MN 55455
United States

Robert Seamans

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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