Veranstaltung
09
Mai 2023

14:15 - 15:45
IWH Research Seminar

Plants in Space

We study the number, size, and location of a firm’s plants. The firm’s decision balances the benefit of delivering goods and services to customers using multiple plants with the cost of setting up and managing these plants, and the potential for cannibalization that arises as their number increases.

Wer
Esteban Rossi-Hansberg  (The University of Chicago)
Wo
via Zoom
Esteban Rossi-Hansberg

Zur Person

Esteban Rossi-Hansberg is the Glen A. Lloyd Distinguished Service Professor in the Kenneth C. Griffin Department of Economics at the University of Chicago (since 2021). His research specializes in international trade, regional and urban economics, as well as growth and organizational economics.

We study the number, size, and location of a firm’s plants. The firm’s decision balances the benefit of delivering goods and services to customers using multiple plants with the cost of setting up and managing these plants, and the potential for cannibalization that arises as their number increases. Modeling the decisions of heterogeneous firms in an economy with a vast number of widely distinct locations is complex because it involves a large combinatorial problem. Using insights from discrete geometry, we study a tractable limit case of this problem in which these forces operate at a local level. Our analysis delivers predictions on sorting across space for industries with many plants per firm. Compared with less productive firms, productive firms place more plants in dense high-rent locations and place fewer plants in markets with low density and low rents. Controlling for the number of plants, productive firms also operate larger plants than those operated by less productive firms. We present evidence consistent with these and several other predictions using U.S. establishment-level data. Read more ...

To join the lecture via ZOOM, please contact Javier Miranda.

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