TY  - JOUR
AU  - Basu,Susanto
AU  - Fernald,John G.
TI  - Are Apparent Productive Spillovers a Figment of Specification Error?
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 5073
PY  - 1999
Y2  - March 1999
UR  - http://www.nber.org/papers/w5073
L1  - http://www.nber.org/papers/w5073.pdf
N1  - Author contact info:
Susanto Basu
Department of Economics
Boston College
140 Commonwealth Avenue
Chestnut Hill, MA 02467
Tel: 617/552-2182
Fax: 617/552-2308
E-Mail: susanto.basu@bc.edu

John Fernald
Research Department, Mail Stop 1130
Federal Reserve Bank of San Francisco
101 Market St
San Francisco, CA 94105
Tel: 415-974-2135
Fax: 815-642-0515
E-Mail: john.fernald@sf.frb.org
AB  - Using data on gross output for two-digit manufacturing industries, we find that an increase in the output of one manufacturing sector has little or no significant effect on the productivity of other sectors.  Using value-added data, however, we confirm the results of previous studies which find that output spillovers instead appear large.  We provide an explanation for these differences, showing why, with imperfect competition, the use of value-added data leads to a spurious finding of large apparent external effects.
ER  -