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Industry Linkages from Joint Production

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Industry Linkages from Joint Production

Written by:
Working Paper Number CES-23-02

Abstract

CES_working_paper_series
Download Industry Linkages from Joint Production [PDF - > 1MB]

I develop a theory of joint production to quantify aggregate economies of scope. In U.S. 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 U.S.-China trade policy on producer prices.

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Page Last Revised - April 21, 2023
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