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VERTICAL INDUSTRY RELATIONS, SPILLOVERS, AND PRODUCTIVITY: EVIDENCE FROM CHILEAN PLANTS *
Author(s) -
López Ricardo A.,
Südekum Jens
Publication year - 2009
Publication title -
journal of regional science
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.171
H-Index - 79
eISSN - 1467-9787
pISSN - 0022-4146
DOI - 10.1111/j.1467-9787.2009.00631.x
Subject(s) - upstream (networking) , downstream (manufacturing) , total factor productivity , productivity , economies of agglomeration , economic geography , industrial organization , upstream and downstream (dna) , economics , business , international trade , operations management , microeconomics , macroeconomics , engineering , telecommunications
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 for intraindustry spillovers, but none for general cross‐industry spillovers. This picture changes when we take vertical industry relations into account. There are important productivity spillovers 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 plant‐level TFP, just as the number of plants in other industries that are neither important upstream suppliers nor downstream customers also has no effect.