Abstract:
:How do regions acquire the knowledge they need to diversify their economic activities? How does the migration of workers among firms and industries contribute to the diffusion of that knowledge? Here we measure the industry-, occupation-, and location-specific knowledge carried by workers from one establishment to the next, using a dataset summarizing the individual work history for an entire country. We study pioneer firms-firms operating in an industry that was not present in a region-because the success of pioneers is the basic unit of regional economic diversification. We find that the growth and survival of pioneers increase significantly when their first hires are workers with experience in a related industry and with work experience in the same location, but not with past experience in a related occupation. We compare these results with new firms that are not pioneers and find that industry-specific knowledge is significantly more important for pioneer than for nonpioneer firms. To address endogeneity we use Bartik instruments, which leverage national fluctuations in the demand for an activity as shocks for local labor supply. The instrumental variable estimates support the finding that industry-specific knowledge is a predictor of the survival and growth of pioneer firms. These findings expand our understanding of the micromechanisms underlying regional economic diversification.
journal_name
Proc Natl Acad Sci U S Aauthors
Jara-Figueroa C,Jun B,Glaeser EL,Hidalgo CAdoi
10.1073/pnas.1800475115subject
Has Abstractpub_date
2018-12-11 00:00:00pages
12646-12653issue
50eissn
0027-8424issn
1091-6490pii
1800475115journal_volume
115pub_type
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