Agglomeration Economies and Entrepreneurship in Italy and in Emilia Romagna Region: Empirical Evidences in the Manufacturing Industries

Entrepreneurship is among the most important elements for the evaluation of the local territorial development and it is certainly a meaningful indicator to understand interregional differences in economic development. Traditional explanations of entrepreneurship rely on evaluating the role of characteristics of the macro environment (profitability, labor market) as well as of the micro environment (composition of local industries). In this work an attempt is made to study this second element, deriving from the literature three hypothesis concerning the linkage between agglomeration economies and local entrepreneurship. The three hypothesis are tested applying an empirical model of entrepreneurial choice and using provincial and industrial data, for the Emilia Romagna region and for Italy. The aim is to characterize the industrial environment of Emilia Romagna region, to explain the superior performance of this region, compared to the others of Italy. Results indicate that, differently from the remainder of Italy, provinces in Emilia Romagna benefit from a greater industrial diversification, which definitively stimulates new firms formation.