Industry Linkages from Joint Production
January 2023
Working Paper Number:
CES-23-02
Abstract
I develop a theory of joint production to quantify aggregate economies of scope. In US manufacturing data, increased export demand in one industry raises a firm's sales in its other industries that share knowledge inputs like R&D and software. I estimate that knowledge inputs contribute to economies of scope through their scalability and partial non-rivalry within the firm. On average a 10 percent increase in output in one industry lowers prices in other industries by 0.4 percent. Such economies of scope manifest disproportionately among knowledge proximate industries and imply large spillover impacts of recent US-China trade policy on producer prices.
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:
production,
econometric,
macroeconomic,
export,
exporter,
industry output,
economically,
spillover,
industries estimate,
gdp
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:
Center for Economic Studies,
Total Factor Productivity,
National Bureau of Economic Research,
Cobb-Douglas,
Bureau of Economic Analysis,
Census of Manufacturing Firms,
Boston College,
Economic Census,
North American Industry Classification System,
Information and Communication Technology Survey,
Census Bureau Disclosure Review Board,
Longitudinal Firm Trade Transactions Database,
Federal Statistical Research Data Center
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