Cross‐industry interlinkages in employment growth: Evidence from Brazil

Using establishment‐level data from Brazil, we estimate the extent to which firm‐ and industry‐level employment and entry decisions respond to changes in the employment decisions of geographically proximate firms and industries. We instrument for employment changes by following Bartik (1991) and Bla...

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Bibliographic Details
Published inReview of development economics Vol. 26; no. 4; pp. 2021 - 2039
Main Authors Carvalho, Daniel R., Lee, Jean N.
Format Journal Article
LanguageEnglish
Published Oxford Blackwell Publishing Ltd 01.11.2022
Subjects
Employment
Immediate
Spillover effect
Transport costs
Brazil
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Summary:Using establishment‐level data from Brazil, we estimate the extent to which firm‐ and industry‐level employment and entry decisions respond to changes in the employment decisions of geographically proximate firms and industries. We instrument for employment changes by following Bartik (1991) and Blanchard and Katz (1992). Our analysis suggests the existence of economically and statistically significant effects of municipality‐level shocks in other industries on the employment and entry decisions of firms and industries in the same municipality. Spillovers are heterogeneous across municipalities and vary based on municipality income, distance from regional economic centers, and transport costs.
ISSN:1363-6669
1467-9361
DOI:10.1111/rode.12881