Nathan Baum-Snow, Professor of Economic Analysis and Policy at the Rotman School of Management, and Premier’s Research Chair in Productivity and Competitiveness, researches urban and real estate economics, labour economics, and economic geography. In a recent paper “Local Productivity Spillovers” Professor Baum Snow and colleagues from McGill University and the University of Rochester use panel data on high-skilled services firms in three large Canadian cities to present evidence of revenue and productivity spillovers across firms at fine spatial scales. Whereas estimates indicate that a doubling of average revenue among peer firms within 75 meters leads to a 2 percent increase in revenue for the average firm, exposure to peers in the top tercile of the firm quality distribution generates about two-thirds of this estimated effect. These impacts are very local and decay out to about 250 meters. The paper finds scant evidence that the average firm benefits from being surrounded by a greater total amount of economic activity at this spatial scale, holding average peer quality constant. There is also evidence that these peer effects appear to primarily reflect knowledge spillovers and the sorting of higher quality firms into more productive locations https://www.schoolofcities.utoronto.ca/city-research-insights is also salient in the data. This work will be featured in the December issue of City Research Insights which looks at downtown recovery. You can read more about Professor Baum-Snow’s work here.
Professor - Economic Analysis and Policy