IDEAS home Printed from https://ideas.repec.org/p/bdi/wptemi/td_850_12.html
   My bibliography  Save this paper

Mapping local productivity advantages in Italy: industrial districts, cities or both?

Author

Listed:
  • Valter Di Giacinto

    (Bank of Italy)

  • Matteo Gomellini

    (Bank of Italy)

  • Giacinto Micucci

    (Bank of Italy)

  • Marcello Pagnini

    (Bank of Italy)

Abstract

We compare the magnitude of local productivity advantages associated with two different spatial concentration patterns in Italy � urban areas and industrial districts. The former have high population density and host a wide range of economic activities, while the latter are marked by a high concentration of small firms producing relatively homogenous goods. Using data from a large sample of Italian manufacturing firms observed over the 1995-2006 period, we detect local productivity advantages for both urban areas and industrial districts. However, firms located in urban areas reap a larger productivity premium than those operating within districts. The advantages of industrial districts have declined over time; those of urban areas have remained stable. Differences in the composition of firm employees between white- and blue-collars explain a small fraction of the urban productivity premium. The quantile regressions show how more productive firms gain larger benefits by locating in urban areas. Our analysis raises the question of whether Italian industrial districts are less fit than urban areas to prosper in a world characterized by advancing globalization and the growing use of ICT.

Suggested Citation

  • Valter Di Giacinto & Matteo Gomellini & Giacinto Micucci & Marcello Pagnini, 2012. "Mapping local productivity advantages in Italy: industrial districts, cities or both?," Temi di discussione (Economic working papers) 850, Bank of Italy, Economic Research and International Relations Area.
  • Handle: RePEc:bdi:wptemi:td_850_12
    as

    Download full text from publisher

    File URL: http://www.bancaditalia.it/pubblicazioni/temi-discussione/2012/2012-0850/en_tema_850.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Pierre‐Philippe Combes & Gilles Duranton & Laurent Gobillon & Diego Puga & Sébastien Roux, 2012. "The Productivity Advantages of Large Cities: Distinguishing Agglomeration From Firm Selection," Econometrica, Econometric Society, vol. 80(6), pages 2543-2594, November.
    2. Pierre-Philippe Combes & Gilles Duranton & Laurent Gobillon & Sébastien Roux, 2010. "Estimating Agglomeration Economies with History, Geology, and Worker Effects," NBER Chapters, in: Agglomeration Economics, pages 15-66, National Bureau of Economic Research, Inc.
    3. Francesca Modena & Concetta Rondinelli, 2011. "Leaving home and housing prices. The experience of Italian youth emancipation," Department of Economics Working Papers 1101, Department of Economics, University of Trento, Italia.
    4. Glaeser, Edward L. & Rosenthal, Stuart S. & Strange, William C., 2010. "Urban economics and entrepreneurship," Journal of Urban Economics, Elsevier, vol. 67(1), pages 1-14, January.
    5. Okubo, Toshihiro & Picard, Pierre M. & Thisse, Jacques-François, 2010. "The spatial selection of heterogeneous firms," Journal of International Economics, Elsevier, vol. 82(2), pages 230-237, November.
    6. Davide Castellani & Giorgia Giovannetti, 2010. "Productivity and the international firm: dissecting heterogeneity," Journal of Economic Policy Reform, Taylor and Francis Journals, vol. 13(1), pages 25-42.
    7. Matteo Bugamelli & Luigi Infante, 2003. "Sunk Costs of Exports," Temi di discussione (Economic working papers) 469, Bank of Italy, Economic Research and International Relations Area.
    8. Federico Cingano & Fabiano Schivardi, 2004. "Identifying the Sources of Local Productivity Growth," Journal of the European Economic Association, MIT Press, vol. 2(4), pages 720-742, June.
    9. ARIMOTO Yutaka & NAKAJIMA Kentaro & OKAZAKI Tetsuji, 2010. "Agglomeration or Selection? The Case of the Japanese Silk-reeling Industry, 1909-1916," Discussion papers 10003, Research Institute of Economy, Trade and Industry (RIETI).
    10. Leonardo Becchetti & Annalisa Castelli, 2005. "Inside the Blackbox: Economic Performance and Technology Adoption when Space and Product Relationships Matter," Rivista di Politica Economica, SIPI Spa, vol. 95(1), pages 181-220, January-F.
    11. Massimo Del Gatto & Gianmarco I. P. Ottaviano & Marcello Pagnini, 2008. "Openness To Trade And Industry Cost Dispersion: Evidence From A Panel Of Italian Firms," Journal of Regional Science, Wiley Blackwell, vol. 48(1), pages 97-129, February.
    12. Stephen Bond & Julie Elston & Jacques Mairesse & Benoit Mulkay, 1997. "Financial Factors and Investment in Belgium, France, Germany and the UK:A Comparison Using Company Panel Data," NBER Working Papers 5900, National Bureau of Economic Research, Inc.
    13. Chad Syverson, 2004. "Market Structure and Productivity: A Concrete Example," Journal of Political Economy, University of Chicago Press, vol. 112(6), pages 1181-1222, December.
    14. Davide Castellani & Giorgia Giovannetti, 2010. "Productivity and the international firm: dissecting heterogeneity," Journal of Economic Policy Reform, Taylor and Francis Journals, vol. 13(1), pages 25-42.
    15. Marc J. Melitz & Giancarlo I. P. Ottaviano, 2021. "Market Size, Trade, and Productivity," World Scientific Book Chapters, in: Firms and Workers in a Globalized World Larger Markets, Tougher Competition, chapter 4, pages 87-108, World Scientific Publishing Co. Pte. Ltd..
    16. Leonardo Becchetti & Andrea de Panizza & Filippo Oropallo, 2003. "Forma giuridica, export e performance dei distretti industriali: un'analisi empirica sull'universo delle imprese italiane," Rivista italiana degli economisti, Società editrice il Mulino, issue 2, pages 185-218.
    17. Chad Syverson, 2011. "What Determines Productivity?," Journal of Economic Literature, American Economic Association, vol. 49(2), pages 326-365, June.
    18. Alessia Matano & Paolo Naticchioni, 2012. "Wage distribution and the spatial sorting of workers," Journal of Economic Geography, Oxford University Press, vol. 12(2), pages 379-408, March.
    19. Richard E. Baldwin & Toshihiro Okubo, 2006. "Heterogeneous firms, agglomeration and economic geography: spatial selection and sorting," Journal of Economic Geography, Oxford University Press, vol. 6(3), pages 323-346, June.
    20. Roberta Rabellotti & Anna Carabelli & Giovanna Hirsch, 2007. "Italian Industrial Districts on the Move: Where Are They Going?," European Planning Studies, Taylor & Francis Journals, vol. 17(1), pages 19-41, July.
    21. Di Addario, Sabrina & Patacchini, Eleonora, 2008. "Wages and the City. Evidence from Italy," Labour Economics, Elsevier, vol. 15(5), pages 1040-1061, October.
    22. Thomas J. Holmes & John J. Stevens, 2002. "Geographic Concentration and Establishment Scale," The Review of Economics and Statistics, MIT Press, vol. 84(4), pages 682-690, November.
    23. Melo, Patricia C. & Graham, Daniel J. & Noland, Robert B., 2009. "A meta-analysis of estimates of urban agglomeration economies," Regional Science and Urban Economics, Elsevier, vol. 39(3), pages 332-342, May.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Antonio Accetturo & Valter Di Giacinto & Giacinto Micucci & Marcello Pagnini, 2018. "Geography, productivity, and trade: Does selection explain why some locations are more productive than others?," Journal of Regional Science, Wiley Blackwell, vol. 58(5), pages 949-979, November.
    2. Combes, Pierre-Philippe & Gobillon, Laurent, 2015. "The Empirics of Agglomeration Economies," Handbook of Regional and Urban Economics, in: Gilles Duranton & J. V. Henderson & William C. Strange (ed.), Handbook of Regional and Urban Economics, edition 1, volume 5, chapter 0, pages 247-348, Elsevier.
    3. Behrens, Kristian & Robert-Nicoud, Frédéric, 2015. "Agglomeration Theory with Heterogeneous Agents," Handbook of Regional and Urban Economics, in: Gilles Duranton & J. V. Henderson & William C. Strange (ed.), Handbook of Regional and Urban Economics, edition 1, volume 5, chapter 0, pages 171-245, Elsevier.
    4. Forslid, Rikard & Okubo, Toshihiro, 2014. "Spatial sorting with heterogeneous firms and heterogeneous sectors," Regional Science and Urban Economics, Elsevier, vol. 46(C), pages 42-56.
    5. Holl, Adelheid, 2016. "Highways and productivity in manufacturing firms," Journal of Urban Economics, Elsevier, vol. 93(C), pages 131-151.
    6. Di Addario, Sabrina & Vuri, Daniela, 2010. "Entrepreneurship and market size. The case of young college graduates in Italy," Labour Economics, Elsevier, vol. 17(5), pages 848-858, October.
    7. Pierre‐Philippe Combes & Gilles Duranton & Laurent Gobillon & Diego Puga & Sébastien Roux, 2012. "The Productivity Advantages of Large Cities: Distinguishing Agglomeration From Firm Selection," Econometrica, Econometric Society, vol. 80(6), pages 2543-2594, November.
    8. OKUBO Toshihiro & Rikard FORSLID, 2010. "Spatial Relocation with Heterogeneous Firms and Heterogeneous Sectors," Discussion papers 10056, Research Institute of Economy, Trade and Industry (RIETI).
    9. Toshihiro Okubo & Eiichi Tomiura, 2014. "Skew Productivity Distributions and Agglomeration: Evidence from Plant-Level Data," Regional Studies, Taylor & Francis Journals, vol. 48(9), pages 1514-1528, September.
    10. Forslid, Rikard & Okubo, Toshihiro, 2017. "Early agglomeration or late agglomeration?: Two phases of development with spatial sorting," CEPR Discussion Papers 11977, C.E.P.R. Discussion Papers.
    11. Forslid, Rikard & Okubo, Toshihiro, 2012. "On the development strategy of countries of intermediate size—An analysis of heterogeneous firms in a multi-region framework," European Economic Review, Elsevier, vol. 56(4), pages 747-756.
    12. Kristian Behrens & Gilles Duranton & Frédéric Robert-Nicoud, 2014. "Productive Cities: Sorting, Selection, and Agglomeration," Journal of Political Economy, University of Chicago Press, vol. 122(3), pages 507-553.
    13. Martin, Philippe & Mayer, Thierry & Mayneris, Florian, 2011. "Spatial concentration and plant-level productivity in France," Journal of Urban Economics, Elsevier, vol. 69(2), pages 182-195, March.
    14. Hisamitsu Saito, 2015. "Firm Heterogeneity, Multiplant Choice, And Agglomeration," Journal of Regional Science, Wiley Blackwell, vol. 55(4), pages 540-559, September.
    15. Arimoto, Yutaka & Nakajima, Kentaro & Okazaki, Tetsuji, 2014. "Sources of productivity improvement in industrial clusters: The case of the prewar Japanese silk-reeling industry," Regional Science and Urban Economics, Elsevier, vol. 46(C), pages 27-41.
    16. Henk L. M. Kox, 2013. "Export Decisions of Services Firms Between Agglomeration Effects and Market-Entry Costs," Advances in Spatial Science, in: Juan R. Cuadrado-Roura (ed.), Service Industries and Regions, edition 127, chapter 0, pages 177-201, Springer.
    17. Breinlich, Holger & Ottaviano, Gianmarco I.P. & Temple, Jonathan R.W., 2014. "Regional Growth and Regional Decline," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 2, chapter 4, pages 683-779, Elsevier.
    18. Syed Hasan & H. Allen Klaiber & Ian Sheldon, 2020. "The impact of science parks on small- and medium-sized enterprises’ productivity distributions: the case of Taiwan and South Korea," Small Business Economics, Springer, vol. 54(1), pages 135-153, January.
    19. Ehrl, Philipp, 2013. "Agglomeration economies with consistent productivity estimates," Regional Science and Urban Economics, Elsevier, vol. 43(5), pages 751-763.
    20. KONDO Keisuke & OKUBO Toshihiro, 2020. "The Impact of Market Size on Firm Selection," Discussion papers 20053, Research Institute of Economy, Trade and Industry (RIETI).

    More about this item

    Keywords

    urban areas; industrial districts; agglomeration economies; productivity; white- and blue-collars; Italian economy;
    All these keywords.

    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)

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bdi:wptemi:td_850_12. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: https://edirc.repec.org/data/bdigvit.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (email available below). General contact details of provider: https://edirc.repec.org/data/bdigvit.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.