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The impact of a large industrial plant closure on the local economy

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  • Francesco David

    (Bank of Italy)

Abstract

The consequences for local economies of industrial crises and the closure of plants employing a large share of the workforce have only recently attracted attention in the literature. This study quantifies the long-term economic effects of an event that occurred in an area of Southern Italy specializing in motor vehicle production, by applying the synthetic control method. The closure of the FIAT plant in Termini Imerese (Sicily) has persistently lowered the employment level and rate, leading to a decline in the working-age population, disposable income and house prices.

Suggested Citation

  • Francesco David, 2025. "The impact of a large industrial plant closure on the local economy," Questioni di Economia e Finanza (Occasional Papers) 952, Bank of Italy, Economic Research and International Relations Area.
    • Handle: RePEc:bdi:opques:qef_952_25
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    File URL: https://www.bancaditalia.it/pubblicazioni/qef/2025-0952/QEF_952_25.pdf
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    JEL classification:

    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General

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