Research

WORKING PAPERS

“Firms for Funding: The Effect of Million Dollar Plants on School Finances and Student Achievement” (w/ Viviana Rodriguez)

Abstract: We compare school districts in counties that win a Million Dollar Plant (MDP) to those in counties considered finalists. We show that winning an MDP leads to a persistent increase in school district revenue that more than offsets the increase in student enrollment. This windfall revenue is mostly spent on instructional expenses and teacher hiring, leading to a reduction in average class size and improvements in reading and math scores. Finally, we find manufacturing plants lead districts to spend additional property tax revenue on capital projects while high-tech establishments induce expenditures on instruction that improve math proficiency scores.

“Does Goliath Help David? Anchoring Firm Creation”

Abstract: Does attracting a “Goliath” firm to a location anchor the formation of a local industrial cluster? I study whether geographic expansions of large, typically multinational firms induce startup entry. I construct a hand-collected data set of “Million Dollar Plants” (MDPs) where a firm announces a winning and a next-best site for a new large facility. Matching these site search contests to restricted-use U.S. Census data shows that winning an MDP leads to economically limited spillover effects. The earliest startup cohorts in winning county supply chain industries are founded by local industry workers and experience 12% faster employment growth relative to those in counterfactual counties, though the effects diminish quickly. Winning counties see supply chain employment that is .71% more concentrated in startup firms than in runners-up counties. These findings highlight the need for scholarship on startup and entry dynamics for the successful implementation of place-based policies aimed at creating industrial clusters.

“Frictions for Firms in the New Geography of Innovation” (w/ Xian Jiang and William Kerr)

Abstract: While the rise in the spatial concentration of U.S. invention in a narrow set of cities is well documented (e.g., Kerr and Robert-Nicoud, 2020), we explore the role of housing price differentials on the concentration of inventor migration across a few cities following the software boom and prominent R&D lab collapses. We document that the rise in concentration was largely fueled by a rise in software and digital technology that forced firms to re-organize their R&D spatial footprint across cities with increasingly disparate housing price trajectories. Our estimates suggest that inventors in cities facing technological displacement are 8.15% more likely to continue patenting if housing prices double. Interestingly, we find ex ante software experience prior to a lab collapse does not insulate a patent inventor from falling out of the set of active U.S. inventors relative to their non-software lab colleagues in the same technology field.

WORKS IN PROGRESS

Who Benefits from Million Dollar Plants? The Missing Local Beneficiaries (w/ Saheel Chodavadia, William Kerr, and Stephen Ross)

Multinationals, Greenfield Investment, and the Environment (w/ Xian Jiang and Haruka Takayama)