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Spillovers and Substitutability in Production

Author

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  • Papps, Kerry L.

    (University of Bradford)

  • Bryson, Alex

    (University College London)

Abstract

Can the existence of positive productivity spillovers between co-workers be explained by the presence of complementarities in a firm's production function? A simple model demonstrates that this is possible when workers perform their tasks sequentially and part of individuals' pay is determined by the firm's output, but also that negative spillovers may arise when workers can raise overall output unilaterally. Data from major league baseball support these predictions. They show that the pairs of players who are most complementary in the production process exert the largest positive spillovers on each other, but that negative spillovers predominate between all player pairs.

Suggested Citation

  • Papps, Kerry L. & Bryson, Alex, 2019. "Spillovers and Substitutability in Production," IZA Discussion Papers 12252, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp12252
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    References listed on IDEAS

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    Cited by:

    1. Sun, Yajie & Liao, Wen-Chi, 2021. "Resource-Exhausted City Transition to continue industrial development," China Economic Review, Elsevier, vol. 67(C).
    2. Kerry L. Papps, 2020. "Sports at the vanguard of labor market policy," IZA World of Labor, Institute of Labor Economics (IZA), pages 481-481, October.
    3. Sarah Jewell & J. James Reade & Carl Singleton, 2020. "It's Just Not Cricket: The Uncontested Toss and the Gentleman's Game," Economics Discussion Papers em-dp2020-10, Department of Economics, University of Reading.

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    More about this item

    Keywords

    spillovers; teams; substitutes; complements; baseball;
    All these keywords.

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects

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