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

  • Valter Di Giacinto

    ()

    (Bank of Italy)

  • Matteo Gomellini

    ()

    (Bank of Italy)

  • Giacinto Micucci

    ()

    (Bank of Italy)

  • Marcello Pagnini

    ()

    (Bank of Italy)

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.

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Paper provided by Bank of Italy, Economic Research and International Relations Area in its series Temi di discussione (Economic working papers) with number 850.

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Date of creation: Jan 2012
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Handle: RePEc:bdi:wptemi:td_850_12
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