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Civic capital and the size distribution of plants: short-run dynamics and long-run equilibrium

Listed author(s):
  • Matthias Bürker
  • G. Alfredo Minerva

We characterize how the size distribution of plants, within narrowly defined industries, is related to the stock of civic capital at the provincial level. Data on plant size come from Italian censuses. Civic capital turns out to have a positive effect on both the average and standard deviation of size. Looking at several precise points of the plant size distribution, we find that it shifts toward the right and becomes more dispersed where civic capital is high. Furthermore, we explore to what extent the effect is heterogeneous across plants in relation to some specific characteristics. The potential endogeneity of current civic capital is addressed by instrumenting it with historical variables. We conclude that the geographic variation in the stock of civic capital poses substantial constraints on plants’ ability to expand. Understanding this is the key for the implementation of effective industrial policies.

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File URL: http://hdl.handle.net/10.1093/jeg/lbt032
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Article provided by Oxford University Press in its journal Journal of Economic Geography.

Volume (Year): 14 (2014)
Issue (Month): 4 ()
Pages: 797-847

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Handle: RePEc:oup:jecgeo:v:14:y:2014:i:4:p:797-847.
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