Geography of firms and propagation of local economic conditions

Abstract This study shows that the geographic network of public firms facilitates propagation local economic conditions across United States. We identify connections among U.S. states based on 10‐K listings and show returns liquidity headquartered in connected exhibit excess comovement. The also generate spillover effects where economy a state affects its amplifies impact economy. In particular, 1% production increase large like California is associated with 6.71% change annual GDP growth, relative to average growth.