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Spatial agglomeration, innovation and firm survival for Italian manufacturing firms

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  • Arnab Bhattacharjee
  • Ornella Maietta
  • Fernanda Mazzotta

Abstract

The innovativeness of a firm not only improves its own survival chances but also can generate externalities on its neighbouring firms. We empirically examine the role of agglomeration economies in how innovativeness affects firm survival in southern Italy, using spatial weights to model spillovers. Spatial Durbin probit model estimates confirm that innovation is an important determinant of firm survival, not only for firms that are themselves innovative but also for those located close to other innovative firms. Adequate definitions of spatial scale and spatial weights are important. Spillover benefits are enhanced by agglomeration economies, but only at a very local scale.

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  • Arnab Bhattacharjee & Ornella Maietta & Fernanda Mazzotta, 2023. "Spatial agglomeration, innovation and firm survival for Italian manufacturing firms," Spatial Economic Analysis, Taylor & Francis Journals, vol. 18(3), pages 318-345, July.
    • Handle: RePEc:taf:specan:v:18:y:2023:i:3:p:318-345
    DOI: 10.1080/17421772.2023.2176538
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    JEL classification:

    • L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies

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