CHAPTER 8 - EMPIRICAL RESULTS OF IT AND NON-IT EXTERNALITY EFFECTS MEASUREMENTS

This chapter presents the results obtained from estimating the models described in chapter 7. Three levels of analysis are implemented: (1) state-level dependent variables with state-level regressors, (2) county-level dependent variables with county-level regressors, and (3) state-level dependent variables with county-level regressors. As explained in chapter 7, this analysis is aimed at capturing the external effects of IT vs. non-IT employment location on labor productivity. These external effects can be further decomposed, following Carlino (1978), into internal economies of scale, localization economies and urbanization economies.

In the first section the results of Ciccone and Hall are approximately replicated using my county and state dataset in order to assess the reasonableness of the data generation procedure described in Chapter 7. The second section describes the results of concentration ratio regressions at the state level and their effects on state labor productivity. The third and fourth consider location and density quotients respectively, and their effects on county labor productivity. The last section summarizes these results and attempts to decompose external effects of each type of employment across counties.