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Productivity and earnings at the firm-plant level: the case of Lombardy’s urban and non-urban agglomerations

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  • Eleonora Bartoloni
  • Maurizio Baussola

Abstract

We analyse business performance by using a unique data set of the universe of Italian local business units. We investigate the pattern of both productivity and profitability by adopting a decomposition technique to document spatial variation across urban and non-urban areas. Aggregate evidence indicates that an urban–non-urban productivity divide exists, but this premium vanishes with respect to profitability. Plant-level estimations using a hierarchical linear model show that area attractiveness positively affects productivity, whereas diseconomies of agglomeration negatively affect profitability. Coping with agglomeration costs is a priority for regional policies to transfer the productivity gains in urban areas into new investment and growth opportunities.

Suggested Citation

  • Eleonora Bartoloni & Maurizio Baussola, 2021. "Productivity and earnings at the firm-plant level: the case of Lombardy’s urban and non-urban agglomerations," Spatial Economic Analysis, Taylor & Francis Journals, vol. 16(3), pages 333-354, July.
    • Handle: RePEc:taf:specan:v:16:y:2021:i:3:p:333-354
    DOI: 10.1080/17421772.2020.1854480
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    1. Eleonora Bartoloni & Andrea Marino & Maurizio Baussola & Davide Romaniello, 2023. "Urban Non-urban Agglomeration Divide: Is There a Gap in Productivity and Wages?," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 9(2), pages 789-827, July.

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