Research
“Does Goliath Help David? Anchor Firms and Startup Clusters” Revise & Resubmit (Second Round), Journal of Urban Economics
Abstract: Does attracting a “Goliath” firm to a county anchor the growth of regional industry clusters? Does attracting a “Goliath” firm to a county anchor the growth of regional industry clusters? Matching a hand-collected dataset of major corporate site selection contests to restricted-use U.S. Census microdata, I show that winning a “Million Dollar Plant” (MDP) increases startup employment in input–output-linked industries by 49% relative to runner-up counties, while local incumbent firms account for 89% of net supply chain job gains. Post-announcement startups are more numerous but smaller than comparable cohorts in runner-up counties. The two main sources of job creation draw on distinct segments of the local labor market as startups rely disproportionately on immigrant workers whereas local incumbents employ more local workers and neither shows evidence of worker flows from the MDP’s ultimate owner.
“Firms for Funding: The Effect of Million Dollar Plants on School Finances and Student Achievement” (w/ Viviana Rodriguez) Journal of Urban Economics 149 (September).
Abstract: We study the impact of large firm entry on local public education by comparing school districts in counties that win a Million Dollar Plant (MDP) to runner-up counties. Winning an MDP increases school district revenues by approximately 3%, primarily through higher local property tax collections. While total per pupil revenue rises modestly, we find gains in instructional spending and small improvements in test scores. Effects vary by firm type: manufacturing MDPs are associated with greater capital outlays but limited achievement gains, whereas high-tech MDPs see increased instructional spending and improved proficiency. Districts with MDPs in highly educated industries exhibit larger increases in instructional spending and student outcomes, even when overall revenue gains are similar.
“Who Benefits from Million Dollar Plants? The Missing Local Beneficiaries”” (w/ Saheel Chodavadia, William Kerr, and Stephen Ross)
Abstract: We study who receives jobs in the industries catalyzed by Million Dollar Plants (MDPs) during 2000-2015. Comparing winning versus runner-up counties, people working the winning county are on average 1.2% more likely to work in the MDP’s four-digit industry compared to the runner-up. This effect takes about nine years post MDP announcement to materialize. Surprisingly, however, there is no employment effect for the initial residents of the winning county compared to runner-up counties; nor do we observe any other difference in economic benefits. These results suggest MDPs generate the promised jobs but source their workforce from outside the winning county.
“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.
“Calcified Corridors: The Growing Concentration of U.S. Inventor Flows” (w/ Xian Jiang and William Kerr)
Abstract: The rate of geographic mobility of inventors in the United States has been increasing. While such mobility is often connected to more spatial diffusion of invention, we show that the patterns of mobility have become increasingly concentrated around a small number of persistent locations. The depth of local inventors pools in 2006-2015 has four times the predictive power that was evident in 1981-1990. Whereas it took 87 MSAs in the United States to account for 50% of inventor flows in the earlier period, that number declined to 54 by 2006-2015.
“Regional Resilience, Startups, and the Great Recession”
Abstract: This paper investigates how employment levels across geographic regions in the U.S. recovered after the Great Recession. Using a Bartik (1991) framework to leverage variation across regions according to their industry composition, this paper highlights a new pattern during the recovery from the Great Recession. Regions that experienced the most dramatic downturns do not recover as quickly as expected, and this deficit is largely explained by a diminished role for startups in job creation. Common perceptions about local labor market quality and credit availability to startups do not explain the startup deficit post-crisis.