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Local agglomeration, entrepreneurship and the 2008 recession: Evidence from Italian industrial districts

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  • Brunello, Giorgio
  • Langella, Monica

Abstract

We investigate whether the impact of recessions on entrepreneurship is affected by the presence of industrial districts, a source of local agglomeration economies. Using Italian Labour Force quarterly data from 2006 to 2011 and a “difference-in-differences” approach, we show that the share of entrepreneurs in local labour markets where industrial districts are present has declined more than in comparable areas after the beginning of the 2008 recession. The estimated negative differential effect ranges between 4.8 and 7.9% in absolute value. We examine alternative explanations — including differences in industrial specialisation and composition, access to credit propensity, exports, population density and the composition of talents — and conclude that our result is consistent with the intense social interactions typical of industrial districts, acting as a multiplier that amplifies the response to shocks.

Suggested Citation

  • Brunello, Giorgio & Langella, Monica, 2016. "Local agglomeration, entrepreneurship and the 2008 recession: Evidence from Italian industrial districts," Regional Science and Urban Economics, Elsevier, vol. 58(C), pages 104-114.
  • Handle: RePEc:eee:regeco:v:58:y:2016:i:c:p:104-114
    DOI: 10.1016/j.regsciurbeco.2016.03.004
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    1. repec:ura:ecregj:v:1:y:2017:i:3:p:732-745 is not listed on IDEAS
    2. Ali, Amjad & Zulfiqar, Kalsoom, 2018. "An Assessment of Association between Natural Resources Agglomeration and Unemployment in Pakistan," MPRA Paper 87968, University Library of Munich, Germany.
    3. repec:gam:jsusta:v:11:y:2019:i:4:p:986-:d:205933 is not listed on IDEAS

    More about this item

    Keywords

    Industrial districts; 2008 recession; Agglomeration effects;

    JEL classification:

    • J1 - Labor and Demographic Economics - - Demographic Economics

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