Nice post. Yes, Fabian’s paper is brilliant. IIRC, in a separate paper, he uses the same shock to study peer effects and finds no impact, which seems completely robust but simultaneously bizarre.
I’m supposed to be studying for my final qualifying exams but talk of physical capital is too enticing… A couple of related papers you may find interesting:
Baruffaldi and Gaesller have a brilliant working paper looking at the more recent impacts of physical capital destruction. Like Fabian, they also have a great source of exogeneity—the accidental destruction of physical capital from natural disasters. The take-home is that specialised capital is particularly harmful in the long run (side note, the paper’s sheer data collection is remarkable!).
Helmers and Overman (2016) also demonstrate the large impact of physical capital using the runner-up location of the Diamond Light Source synchrotron in the UK.
I’m in the early stages of working on some ideas around the importance of physical capital. It would be good to chat at some point.
This first paper, by B&G, is such a fascinating piece of data collection work. You’re absolutely right. Do you have any rough guesses on how much of the issue is building a course of research on niche capital itself vs. the kind of person who does that kind of thing. I’m sure they both have an effect. I ask because I would be not shocked if the hypothesis, “People usually only pursue a course of research that requires specialized equipment if they are extremely dedicated to that problem over all others/that is an area of clear comparative advantage to them and they don’t believe they can contribute as much to other areas.”
That might be mere conjecture though and I’m not one to lend too much credibility to personal hunches without evidence. Do you think there’s any work that can help us think through that question? Even if tangentially. As much as it can feel like it sometimes, a paper does not exist for everything.
Nice post. Yes, Fabian’s paper is brilliant. IIRC, in a separate paper, he uses the same shock to study peer effects and finds no impact, which seems completely robust but simultaneously bizarre.
I’m supposed to be studying for my final qualifying exams but talk of physical capital is too enticing…
A couple of related papers you may find interesting:
Baruffaldi and Gaesller have a brilliant working paper looking at the more recent impacts of physical capital destruction. Like Fabian, they also have a great source of exogeneity—the accidental destruction of physical capital from natural disasters. The take-home is that specialised capital is particularly harmful in the long run (side note, the paper’s sheer data collection is remarkable!).
Helmers and Overman (2016) also demonstrate the large impact of physical capital using the runner-up location of the Diamond Light Source synchrotron in the UK.
I’m in the early stages of working on some ideas around the importance of physical capital. It would be good to chat at some point.
This first paper, by B&G, is such a fascinating piece of data collection work. You’re absolutely right. Do you have any rough guesses on how much of the issue is building a course of research on niche capital itself vs. the kind of person who does that kind of thing. I’m sure they both have an effect. I ask because I would be not shocked if the hypothesis, “People usually only pursue a course of research that requires specialized equipment if they are extremely dedicated to that problem over all others/that is an area of clear comparative advantage to them and they don’t believe they can contribute as much to other areas.”
That might be mere conjecture though and I’m not one to lend too much credibility to personal hunches without evidence. Do you think there’s any work that can help us think through that question? Even if tangentially. As much as it can feel like it sometimes, a paper does not exist for everything.