Using data from firms' "auxiliary" establishments, researchers developed a measure of knowledge within firms that is associated with increased growth and industry switching. Their model assumes that firms combine physical and knowledge inputs as complements, and also assumes that in-house knowledge production provides advantages to firms and facilitaties structural transformation.
Abstract and Citation
Structural Change Within versus Across Firms: Evidence from the United States
Xiang Ding, Teresa C. Fort, Stephen J. Redding, and Peter K. Schott
NBER Working Paper No. 30127
JEL No. D24,F14,L16,O47