Productivity spillovers of organization capital

Abstract

Investments in organization capital increase productivity of not just the investing firm but could also spillover to other firms—similar to investments in research and development. Recent evidence at the industry and economy level suggests such spillovers could be important. In this paper, we fail to find evidence of knowledge spillovers from organization capital that increase the productivity or market valuation of technologically similar manufacturing firms in the US. This lack of evidence at the firm-level suggests caution is in order at the more aggregate level, where spillover channels are harder to identify convincingly.