Knowledge exchange and productivity spill-overs in Bangladeshi garment factories

Abstract Knowledge sharing between employees has long been viewed as a major driver of firm productivity growth, and the strength of productivity spill-overs within firms is a common measure of knowledge sharing. Using data from three Bangladeshi garment factories, I first find that spill-overs are stronger within organizational sub-divisions of the factories than across. I then show that a management intervention that routinely brought together workers producing the same garments to exchange production knowledge further strengthened spill-overs within sub-divisions, but not across, when it was implemented in randomly selected sub-divisions. These findings suggest that boundaries between sub-divisions pose strong frictions to knowledge sharing within firms.