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Mapping local productivity advantages in Italy: industrial districts, cities or both?

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  • Valter Di Giacinto

    ()
    (Bank of Italy)

  • Matteo Gomellini

    ()
    (Bank of Italy)

  • Giacinto Micucci

    ()
    (Bank of Italy)

  • Marcello Pagnini

    ()
    (Bank of Italy)

Abstract

We compare the magnitude of local productivity advantages associated with two different spatial concentration patterns in Italy – urban areas and industrial districts. The former have high population density and host a wide range of economic activities, while the latter are marked by a high concentration of small firms producing relatively homogenous goods. Using data from a large sample of Italian manufacturing firms observed over the 1995-2006 period, we detect local productivity advantages for both urban areas and industrial districts. However, firms located in urban areas reap a larger productivity premium than those operating within districts. The advantages of industrial districts have declined over time; those of urban areas have remained stable. Differences in the composition of firm employees between white- and blue-collars explain a small fraction of the urban productivity premium. The quantile regressions show how more productive firms gain larger benefits by locating in urban areas. Our analysis raises the question of whether Italian industrial districts are less fit than urban areas to prosper in a world characterized by advancing globalization and the growing use of ICT.

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Bibliographic Info

Paper provided by Bank of Italy, Economic Research and International Relations Area in its series Temi di discussione (Economic working papers) with number 850.

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Date of creation: Jan 2012
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Handle: RePEc:bdi:wptemi:td_850_12

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Keywords: urban areas; industrial districts; agglomeration economies; productivity; white- and blue-collars; Italian economy;

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  1. Okubo, Toshihiro & Picard, Pierre M. & Thisse, Jacques-François, 2010. "The spatial selection of heterogeneous firms," Journal of International Economics, Elsevier, vol. 82(2), pages 230-237, November.
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Cited by:
  1. Giorgia Giovannetti & Enrico Marvasi & Marco Sanfilippo, 2014. "Supply Chains and the Internalization of SMEs: Evidence from Italy," RSCAS Working Papers 2014/62, European University Institute.
  2. Roberto BASILE & Cristiana DONATI & Rosanna PITTIGLIO, 2013. "Industry Structure And Employment Growth: Evidence From Semiparametric Geoadditive Models," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 38, pages 121-160.
  3. Antonio Accetturo & Valter Di Giacinto & Giacinto Micucci & Marcello Pagnini, 2013. "Geography, productivity and trade: does selection explain why some locations are more productive than others?," Temi di discussione (Economic working papers) 910, Bank of Italy, Economic Research and International Relations Area.
  4. Luigi Cannari, 2011. "Networks of Firms and Local Territory: A Comment," QA - Rivista dell'Associazione Rossi-Doria, Associazione Rossi Doria, issue 4, December.

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