Essays in Applied Microeconomics
Open Access
- Author:
- Lychagin, Sergey
- Graduate Program:
- Economics
- Degree:
- Doctor of Philosophy
- Document Type:
- Dissertation
- Date of Defense:
- May 13, 2011
- Committee Members:
- Kala Krishna, Dissertation Advisor/Co-Advisor
Kala Krishna, Committee Chair/Co-Chair
Coenraad Arnout P Pinkse, Committee Member
Mark John Roberts, Committee Member
John Raymond Moran Jr., Committee Member - Keywords:
- insider econometrics
productivity
Knowledge spillovers - Abstract:
- CHAPTER 1 (with Joris Pinkse, Margaret Slade, and John Van Reenen): Spillovers in Space: Does Geography Matter? We simultaneously assess the contributions to productivity of three sources of research and development spillovers: geographic, technology and product--market proximity. To do this, we construct a new measure of geographic proximity that is based on the distribution of a firm's inventor locations rather than its headquarters, and we report both parametric and semiparametric estimates of our geographic--distance functions. We find that: i) Geographic space matters even after conditioning on horizontal and technological spillovers; ii) Technological proximity matters; iii) Product--market proximity is less important; iv) Locations of researchers are more important than headquarters but both have explanatory power; and v) Geographic markets are very local. CHAPTER 2: Spillovers, Absorptive Capacity and Agglomeration. I study knowledge spillovers in an industry where firms are mobile and heterogeneous in their ability to adopt outside knowledge (absorptive capacity). I develop a static model of industry agglomeration where, in equilibrium, the force of attraction induced by spillovers is counteracted by the force of repulsion created by local competition. The model is applied to a sample of the US software firms. I estimate the structural parameters of the model and obtain the following results: i) The data are consistent with highly localized knowledge spillovers; ii) The attraction force induced by spillovers creates a significant sorting pattern placing firms with higher absorptive capacity in more agglomerated counties; iii) Ignoring firm heterogeneity in absorptive capacity leads to substantially biased estimates of gains from spillovers in policy experiments. CHAPTER 3 (with Sanghamitra Das, Kala Krishna, and Rohini Somanathan): Back on the Rails: Competition and Productivity in State-owned Industry. We use a proprietary data set on the floor-level operations at the Bhilai Rail and Structural Mill (RSM) in India to understand how output rose sharply in response to competitive pressures. Output increases came predominantly from reductions in production delays of various kinds. We model interruptions to the production process as a function of worker characteristics and training and find that a large part of the avoidable delay reductions are attributable to a particular form of training, suggesting that such investments can have very high returns. Our work suggests very high returns to knowledge-enhancing investments in emerging economies.