Firm-Level Productivity Spillovers in China's Chemical Industry: A Spatial Hausman-Taylor Approach

Badi H. Baltagi, Peter H. Egger, Michaela Kesina

Research output: Contribution to journalArticle

16 Scopus citations

Abstract

This paper assesses intra-sectoral spillovers in total factor productivity (TFP) across Chinese producers in the chemical industry using panel data on 12,552 firms observed over 2004-2006. We specify TFP as a composite of observable factors such as export market participation, foreign as well as public ownership, the extent of accumulated intangible assets, and unobservable components. We introduce spatial spillovers in TFP through contextual effects of observable variables as well as spatial dependence of the disturbances, extending the Hausman and Taylor (1981) estimator to account for spatial correlation in the error term which may be homoskedastic or heteroskedastic.

Original languageEnglish (US)
Pages (from-to)214-248
Number of pages35
JournalJournal of Applied Econometrics
Volume31
Issue number1
DOIs
StatePublished - Jan 1 2016

ASJC Scopus subject areas

  • Social Sciences (miscellaneous)
  • Economics and Econometrics

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