1 论文标题
Productivity As If Space Mattered: An Application to Factor Markets Across China
2 作者信息
Wenya Cheng, John Morrow and Kitjawat Tacharoen
3 出处和链接（比如，NBER working paper No.11000）
CEP Discussion Paper No 1181 December 2012
4 摘要
Optimal production decisions depend on local market characteristics. This paper develops a
model to explain firm labor demand and firm density across regions. Firms vary in their
technology to combine imperfectly substitutable worker types, and locate across regions with
distinct distributions of workers and wages. Firm technologies which best match regional
labor markets explain both productivity differences and firm density. Estimating structural
model parameters is simple and relies on a two stage OLS procedure. The first stage
estimates local market conditions using firm employment and regional data, while the second
incorporates regional costs into production function estimation. The method is applied to
Chinese manufacturing, population census and geographic data to estimate local market costs
and production technologies. In line with the model, we find that labor markets which
provide cost advantages explain substantial differences in firm productivity. Furthermore,
regions which have lower optimal hiring costs attract more firms per capita.