Regions with diverse industries and large markets attract high-productivity plants, boosting local productivity.
Plants in the Chilean food industry choose where to set up based on factors like how productive they are and how much other plants are nearby, not just random chance. Researchers looked at how these factors affect regional productivity in manufacturing plants. They found that high-productivity plants (which export goods) tend to group together in regions where there are many different types of plants and a big market. This suggests that when plants choose where to locate themselves, it has a bigger impact on how well a region does economically compared to just being near other plants.