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An anatomy of Italian cities: evidence from firm-level data

Author

Listed:
  • Andrea Lamorgese

    (Bank of Italy)

  • Andrea Petrella

    (Bank of Italy)

Abstract

Economic activity is concentrated in urban areas and during the 20th century the urban population grew at a faster rate than the national average in many countries. Why is this the case? In this paper we focus on the urban premium in firms� productivity. We run two exercises. First, we document an urban premium in the level of firms� productivity and we inspect its determinants among both firm and city characteristics. Second, we corroborate the evidence on the determinants of the urban productivity gap, studying the heterogeneity in productivity across urban and non-urban areas by means of a Blinder�Oaxaca decomposition. The results point to a sizable urban productivity premium, mostly explained by firm size and by some characteristics of urban areas, in particular the average levels of educational attainment and labor market participation.

Suggested Citation

  • Andrea Lamorgese & Andrea Petrella, 2016. "An anatomy of Italian cities: evidence from firm-level data," Questioni di Economia e Finanza (Occasional Papers) 362, Bank of Italy, Economic Research and International Relations Area.
    • Handle: RePEc:bdi:opques:qef_362_16
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    File URL: https://www.bancaditalia.it/pubblicazioni/qef/2016-0362/QEF_362_16.pdf
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    References listed on IDEAS

    as
    1. Duranton, Gilles & Puga, Diego, 2014. "The Growth of Cities," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 2, chapter 5, pages 781-853, Elsevier.
    2. Oaxaca, Ronald, 1973. "Male-Female Wage Differentials in Urban Labor Markets," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 14(3), pages 693-709, October.
    3. Alan S. Blinder, 1973. "Wage Discrimination: Reduced Form and Structural Estimates," Journal of Human Resources, University of Wisconsin Press, vol. 8(4), pages 436-455.
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    Cited by:

    1. Paolo Emilio Mistrulli & Luca Antelmo & Maddalena Galardo & Iconio Garrì & Dario Pellegrino & Davide Revelli & Vito Savino, 2019. "Why do banks close? The geography of branch pruning," Questioni di Economia e Finanza (Occasional Papers) 540, Bank of Italy, Economic Research and International Relations Area.
    2. Maddalena Galardo & Iconio Garrì & Paolo Emilio Mistrulli & Davide Revelli, 2021. "The geography of banking: Evidence from branch closings," Economic Notes, Banca Monte dei Paschi di Siena SpA, vol. 50(1), February.
    3. Marianna Belloc & Paolo Naticchioni & Claudia Vittori, 2023. "Urban wage premia, cost of living, and collective bargaining," Journal of Economic Geography, Oxford University Press, vol. 23(1), pages 25-50.
    4. Andrea R. Lamorgese & Elisabetta Olivieri & Marco Paccagnella, 2019. "The Wage Premium in Italian Cities," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 5(2), pages 251-279, July.
    5. valter di Giacinto & Giacinto Micucci & Alessandro Tosoni, 2018. "Knowledge intensive business services and urban areas: an analysis of localization and productivity on Italian data," Questioni di Economia e Finanza (Occasional Papers) 443, Bank of Italy, Economic Research and International Relations Area.

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    More about this item

    Keywords

    urban productivity premium; agglomeration; urban growth;
    All these keywords.

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General

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