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The productivity advantages of spatial concentration: evidence from Italian Industrial districts and cities


  • Valter Di Giacinto
  • Matteo Gomellini
  • Giacinto Micucci
  • Marcello Pagnini


The paper provides new, more detailed evidence on the productivity of manufacturing firms across Italian local labour markets by analysing a large firm-level database covering the 1995-2006 period. The analysis identifies two types of highly agglomerated areas - large cities and industrial districts - as opposed to smaller, non-specialized local markets, and shows that manufacturing firms operating in both types of agglomerated areas achieve higher total factor productivity levels. However, the urban areas attract a substantially larger estimated premium than the districts and, according to the evidence, employment skill distribution contributes only marginally to the urban productivity premium. In addition, the analysis of overall productivity distribution indicates that urban advantages are particularly high for the pool of most efficient firms, while the opposite is true for industrial districts. The estimated productivity surplus of industrial clusters declined significantly over the review period but remained stable for large cities. Overall, the above findings raise questions about the different capabilities of specialized clusters to prosper in an increasingly globalized world compared with urban areas.

Suggested Citation

  • Valter Di Giacinto & Matteo Gomellini & Giacinto Micucci & Marcello Pagnini, 2012. "The productivity advantages of spatial concentration: evidence from Italian Industrial districts and cities," ECONOMIA E POLITICA INDUSTRIALE, FrancoAngeli Editore, vol. 2012(2), pages 163-175.
  • Handle: RePEc:fan:polipo:v:html10.3280/poli2012-002007

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    More about this item


    Aree urbane; distretti industriali; economie di agglomerazione; produttività;

    JEL classification:

    • C52 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Evaluation, Validation, and Selection
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)


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