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Explaining the Size Distribution of Plants: An Approach Based on Civic Capital

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Abstract

We show that the distribution of plant size within narrowly defined industries is affected by the variation in the stock of civic capital that occurs at the provincial level. Data on plant size come from the 2001 Italian Census of Manufacturing and Services. Civic capital turns out to have a positive effect on both the average and the standard deviation of the plant size distribution. This effect is stronger in labor-intensive industries. The potential endogeneity of current civic capital is addressed by instrumenting it with historical variables. Our interpretation for these results is that civic capital is associated with reduced opportunistic behavior, which improves intra-firm cooperation and hampers the incidence of principal-agent problems, thus allowing plants to operate on a larger scale.

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  • G. A. Minerva & M. Burker, 2011. "Explaining the Size Distribution of Plants: An Approach Based on Civic Capital," Working Papers wp755, Dipartimento Scienze Economiche, Universita' di Bologna.
    • Handle: RePEc:bol:bodewp:wp755
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    1. La Porta, Rafael & Florencio Lopez-de-Silanes & Andrei Shleifer & Robert W. Vishny, 1997. "Legal Determinants of External Finance," Journal of Finance, American Finance Association, vol. 52(3), pages 1131-1150, July.
    2. Guido De Blasio & Giorgio Nuzzo, 2010. "Historical Traditions Of Civicness And Local Economic Development," Journal of Regional Science, Wiley Blackwell, vol. 50(4), pages 833-857, October.
    3. Ramon Casadesus‐Masanell, 2004. "Trust in Agency," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 13(3), pages 375-404, September.
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    Cited by:

    1. Matthias Buerker & Gaetano Alfredo Minerva, 2013. "Civic Capital and the Vertical Integration of Service Provision: Evidence from Italy," ERSA conference papers ersa13p1209, European Regional Science Association.

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    More about this item

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification
    • L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General
    • A13 - General Economics and Teaching - - General Economics - - - Relation of Economics to Social Values

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