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Firm exit and spatial agglomeration. Evidence on the resilience of Italian provinces

Author

Listed:
  • Giulio Cainelli
  • Sandro Montresor
  • Giuseppe Vittucci Marzetti

Abstract

The paper investigates the effect of spatial agglomeration on firm exit. In particular, the role of specialization and local variety in production is addressed. The extent to which industrial clusters can be actually retained industrial districts is also considered. Empirical evidence is provided for a large panel of Italian provinces and manufacturing sectors over the period 1995-2007. Urbanization economies significantly diminish firm exit of industries at the local level. Specialization also does, but only up to a certain level. Firm exit is also reduced by industrial variety, even far from the local specialization core. Industrial districts, instead, are neither less nor more resilient to industrial dynamics, unless variety is controlled for.

Suggested Citation

  • Giulio Cainelli & Sandro Montresor & Giuseppe Vittucci Marzetti, 2010. "Firm exit and spatial agglomeration. Evidence on the resilience of Italian provinces," Openloc Working Papers 1021, Public policies and local development.
  • Handle: RePEc:trn:utwpol:1021
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    File URL: http://www.openloc.eu/cms/storage/openloc/working_papers/2010/CainelliMontresorVittucci2010a.pdf
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    More about this item

    Keywords

    Firm exit; Firm survival; Industrial districts; Spatial agglomeration; Related variety; Unrelated variety;

    JEL classification:

    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • G20 - Financial Economics - - Financial Institutions and Services - - - General

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