Working Paper: CEPR ID: DP13200
Authors: Marta Bisztray; Miklos Koren; Adam Szeidl
Abstract: We use firm-level data from Hungary to estimate knowledge spillovers in importing through fine spatial and managerial networks. By identifying from variation in peers' import experience across source countries, by comparing the spillover from neighboring buildings with a cross-street placebo, and by exploiting plausibly exogenous firm moves, we obtain credible estimates and establish three results. (1) There are significant knowledge spillovers in both spatial and managerial networks. Having a peer which has imported from a particular country more than doubles the probability of starting to import from that country, but the effect quickly decays with distance. (2) Spillovers are heterogeneous: they are stronger when firms or peers are larger or more productive, and exhibit complementarities in firm and peer productivity. (3) The model-implied social multiplier is highly skewed, implying that targeting an import-encouragement policy to firms with many and productive neighbors can make it 26% more effective. These results highlight the benefit of firm clusters in facilitating the diffusion of business practices.
Keywords: imports; peer effects; spatial spillovers; manager networks; social multiplier
JEL Codes: F14; R32; D22
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Peer with import experience from a specific country (F10) | Probability of a firm starting to import from that country (F14) |
| Firm size/productivity (L25) | Strength of spillovers (F69) |
| Targeting import-encouragement policies towards firms with productive neighbors (F12) | Effectiveness of policies (F68) |
| Distance from peer (C92) | Effect of spillovers (F69) |