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Do Agglomeration Externalities Enhance Regional Performances in Production Process? A Stochastic Frontier Approach

In: Geographical Labor Market Imbalances. Recent Explanations and Cures

Author

Listed:
  • Massimiliano Agovino

    (Università di Napoli “Parthenope")

  • Agnese Rapposelli

    (Università “G.d’Annunzio” di Chieti-Pescara)

Abstract

The aim of the present work is to estimate an aggregate production function for the 20 Italian regions by emphasizing the role that agglomeration externalities (localization externalities and urbanization externalities) and spatial spillovers have in influencing the technical efficiency of the production process. To this purpose, we use the stochastic frontier approach. The results highlight the relevance and the positive impact that localization and urbanization externalities have in improving the efficiency level of the production process of Northern and Central Italian regions. Furthermore, spatial spillovers represent a source of development and growth for Northern, Central, and Southern regions. In particular, after considering spatial spillovers, we observe a reduction of the concentration and an increase of the diffusion process of efficiency among Italian regions. For some Northern and Central regions, we can observe that there are some richer regions and some poorer regions with regard to their capability to benefit from spatial spillovers.

Suggested Citation

  • Massimiliano Agovino & Agnese Rapposelli, 2015. "Do Agglomeration Externalities Enhance Regional Performances in Production Process? A Stochastic Frontier Approach," AIEL Series in Labour Economics, in: Chiara Mussida & Francesco Pastore (ed.), Geographical Labor Market Imbalances. Recent Explanations and Cures, edition 1, chapter 7, pages 143-166, AIEL - Associazione Italiana Economisti del Lavoro.
    • Handle: RePEc:ail:chapts:08-07
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    Keywords

    Agglomeration externalities; Spatial spillovers; Stochastic frontier; Technical efficiency; Italian regions; Spatial correlation;
    All these keywords.

    JEL classification:

    • R10 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • C2 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables

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