IDEAS home Printed from https://ideas.repec.org/p/trn/utwpol/1114.html
   My bibliography  Save this paper

Agglomeration, related-variety and internationalisation. Does a relationship exist?

Author

Listed:
  • Giulio Cainelli
  • Eleonora Di Maria
  • Roberto Ganau

Abstract

This paper uses a large sample of Italian manufacturing firms over the period 2004-2006, to investigate whether different types of agglomeration externalities affect firms’ internationalisation modes. In addition to specialisation economies, Jacobs externalities are analysed following the recent contribution by FRENKEN et al. (2007) which distinguishes between related and unrelated variety. Econometric results show that agglomeration externalities – in particular, specialisation and related-variety – positively affect export, while they do not affect the multinational strategy. Moreover, results show that the impact of agglomeration externalities on firms’ internationalisation decisions is higher for small sized firms.

Suggested Citation

  • Giulio Cainelli & Eleonora Di Maria & Roberto Ganau, 2011. "Agglomeration, related-variety and internationalisation. Does a relationship exist?," Openloc Working Papers 1114, Public policies and local development.
    • Handle: RePEc:trn:utwpol:1114
    as

    Download full text from publisher

    File URL: http://www.openloc.eu/cms/storage/openloc/working_papers/2011/CainelliDimariaGanau2011.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Romer, Paul M, 1986. "Increasing Returns and Long-run Growth," Journal of Political Economy, University of Chicago Press, vol. 94(5), pages 1002-1037, October.
    2. Frank Barry & Holger Görg & Eric Strobl, 2004. "Foreign direct investment, agglomerations, and demonstration effects: An empirical investigation," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 140(3), pages 583-600, September.
    3. Head, Keith & Ries, John & Swenson, Deborah, 1995. "Agglomeration benefits and location choice: Evidence from Japanese manufacturing investments in the United States," Journal of International Economics, Elsevier, vol. 38(3-4), pages 223-247, May.
    4. Feldman, Maryann P. & Audretsch, David B., 1999. "Innovation in cities:: Science-based diversity, specialization and localized competition," European Economic Review, Elsevier, vol. 43(2), pages 409-429, February.
    5. Li, Ben & Lu, Yi, 2009. "Geographic concentration and vertical disintegration: Evidence from China," Journal of Urban Economics, Elsevier, vol. 65(3), pages 294-304, May.
    6. Jeffrey M Wooldridge, 2010. "Econometric Analysis of Cross Section and Panel Data," MIT Press Books, The MIT Press, edition 2, volume 1, number 0262232588, December.
    7. Elhanan Helpman & Marc J. Melitz & Stephen R. Yeaple, 2004. "Export Versus FDI with Heterogeneous Firms," American Economic Review, American Economic Association, vol. 94(1), pages 300-316, March.
    8. Henderson, Vernon & Kuncoro, Ari & Turner, Matt, 1995. "Industrial Development in Cities," Journal of Political Economy, University of Chicago Press, vol. 103(5), pages 1067-1090, October.
    9. Ron Boschma & Simona Iammarino, 2009. "Related Variety, Trade Linkages, and Regional Growth in Italy," Economic Geography, Clark University, vol. 85(3), pages 289-311, July.
    10. Bennett Harrison & Maryellen R. Kelley & Jon Gant, 1996. "Innovative Firm Behavior and Local Milieu: Exploring the Intersection of Agglomeration, Firm Effects, and Technological Change," Economic Geography, Taylor & Francis Journals, vol. 72(3), pages 233-258, July.
    11. Luigi Benfratello & Tiziano Razzolini, 2008. "Firms’ Productivity and Internationalisation Choices: Evidence for a Large Sample of Italian Firms," Development Working Papers 236, Centro Studi Luca d'Agliano, University of Milano.
    12. Raffaele Paci & Stefano Usai, 2000. "The Role of Specialisation and Diversity Externalities in the Agglomeration of Innovative Activities," Rivista italiana degli economisti, Società editrice il Mulino, issue 2, pages 237-268.
    13. Giulio Cainelli & Donato Iacobucci, 2012. "Agglomeration, Related Variety, and Vertical Integration," Economic Geography, Clark University, vol. 88(3), pages 255-277, July.
    14. Glaeser, Edward L & Hedi D. Kallal & Jose A. Scheinkman & Andrei Shleifer, 1992. "Growth in Cities," Journal of Political Economy, University of Chicago Press, vol. 100(6), pages 1126-1152, December.
      • Edward L. Glaeser & Hedi D. Kallal & Jose A. Scheinkman & Andrei Shleifer, 1991. "Growth in Cities," NBER Working Papers 3787, National Bureau of Economic Research, Inc.
      • Glaeser, Edward Ludwig & Kallal, Hedi D. & Scheinkman, Jose A. & Shleifer, Andrei, 1992. "Growth in Cities," Scholarly Articles 3451309, Harvard University Department of Economics.
    15. 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.
    16. Koen Frenken & Frank G. van Oort & Thijs Verburg & Ron A. Boschma, 2004. "Variety and regional economic growth in the Netherlands," Papers in Evolutionary Economic Geography (PEEG) 0502, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Dec 2004.
    17. K. J. Arrow, 1971. "The Economic Implications of Learning by Doing," Palgrave Macmillan Books, in: F. H. Hahn (ed.), Readings in the Theory of Growth, chapter 11, pages 131-149, Palgrave Macmillan.
    18. Robert Dekle, 2002. "Industrial Concentration And Regional Growth: Evidence From The Prefectures," The Review of Economics and Statistics, MIT Press, vol. 84(2), pages 310-315, May.
    19. Raffaello Bronzini, 2004. "Foreign Direct Investment and Agglomeration: Evidence from Italy," ERSA conference papers ersa04p321, European Regional Science Association.
    20. Gerben van der Panne & Cees van Beers, 2006. "On the Marshall--Jacobs controversy: it takes two to tango," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 15(5), pages 877-890, October.
    21. Leonardo Becchetti & Stefania Rossi, 2000. "The Positive Effect of Industrial District on the Export Performance of Italian Firms," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 16(1), pages 53-68, February.
    22. Amil Petrin & Brian P. Poi & James Levinsohn, 2004. "Production function estimation in Stata using inputs to control for unobservables," Stata Journal, StataCorp LP, vol. 4(2), pages 113-123, June.
    23. Stefano Micelli & Maria Chiarvesio & Eleonora Di Maria, 2006. "Strategie e modelli di internazionalizzazione delle imprese distrettuali italiane," ECONOMIA E POLITICA INDUSTRIALE, FrancoAngeli Editore, vol. 2006(3), pages 99-126.
    24. Thomas J. Holmes, 1999. "Localization Of Industry And Vertical Disintegration," The Review of Economics and Statistics, MIT Press, vol. 81(2), pages 314-325, May.
    25. Davide Castellani & Antonello Zanfei, 2007. "Internationalisation, Innovation and Productivity: How Do Firms Differ in Italy?," The World Economy, Wiley Blackwell, vol. 30(1), pages 156-176, January.
    26. Raffaello Bronzini, 2007. "FDI Inflows, Agglomeration and Host Country Firms' Size: Evidence from Italy," Regional Studies, Taylor & Francis Journals, vol. 41(7), pages 963-978.
    27. Koen Frenken & Frank Van Oort & Thijs Verburg, 2007. "Related Variety, Unrelated Variety and Regional Economic Growth," Regional Studies, Taylor & Francis Journals, vol. 41(5), pages 685-697.
    28. Marc J. Melitz, 2003. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," Econometrica, Econometric Society, vol. 71(6), pages 1695-1725, November.
    29. Anders Malmberg & Bo Malmberg & Per Lundequist, 2000. "Agglomeration and Firm Performance: Economies of Scale, Localisation, and Urbanisation among Swedish Export Firms," Environment and Planning A, , vol. 32(2), pages 305-321, February.
    30. Ron Boschma & Asier Minondo & Mikel Navarro, 2012. "Related variety and regional growth in Spain," Papers in Regional Science, Wiley Blackwell, vol. 91(2), pages 241-256, June.
    31. Leon Oerlemans & Marius Meeus, 2005. "Do Organizational and Spatial Proximity Impact on Firm Performance?," Regional Studies, Taylor & Francis Journals, vol. 39(1), pages 89-104.
    32. Emanuele BACCHIOCCHI & Massimo FLORIO & Anna GIUNTA, 2008. "Internationalisation and the agglomeration effect: evidence from the Italian automotive supply chain," Departmental Working Papers 2008-30, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano, revised 27 Oct 2010.
    33. R. Paci & S. Usai, 2006. "Agglomeration economies and growth-The case of Italian local labour systems, 1991-2001," Working Paper CRENoS 200612, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
    34. Frank Neffke & Martin Henning & Ron Boschma & Karl-Johan Lundquist & Lars-Olof Olander, 2011. "The Dynamics of Agglomeration Externalities along the Life Cycle of Industries," Regional Studies, Taylor & Francis Journals, vol. 45(1), pages 49-65.
    35. James Levinsohn & Amil Petrin, 2003. "Estimating Production Functions Using Inputs to Control for Unobservables," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 70(2), pages 317-341.
    36. Roberto Antonietti & Giulio Cainelli, 2011. "The role of spatial agglomeration in a structural model of innovation, productivity and export: a firm-level analysis," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 46(3), pages 577-600, June.
    37. Head, C. Keith & Ries, John C. & Swenson, Deborah L., 1999. "Attracting foreign manufacturing: Investment promotion and agglomeration," Regional Science and Urban Economics, Elsevier, vol. 29(2), pages 197-218, March.
    38. Wheeler, David & Mody, Ashoka, 1992. "International investment location decisions : The case of U.S. firms," Journal of International Economics, Elsevier, vol. 33(1-2), pages 57-76, August.
    39. Frank Neffke, 2008. "Time-Varying Agglomeration Externalities in UK Counties between 1841 and 1971," Papers in Evolutionary Economic Geography (PEEG) 0818, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Dec 2008.
    40. Gerben van der Panne & Cees van Beers, 2006. "On the Marshall - Jacobs Controversy It takes two to tango," DRUID Working Papers 06-23, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
    41. Baltzopoulos, Apostolos, 2009. "Agglomeration Externalities and Entrepreneurship - micro-level evidence from Sweden," Working Paper Series in Economics and Institutions of Innovation 190, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
    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. Giulio Cainelli & Roberto Ganau & Donato Iacobucci, 2016. "Do Geographic Concentration and Vertically Related Variety Foster Firm Productivity? Micro-Evidence from Italy," Growth and Change, Wiley Blackwell, vol. 47(2), pages 197-217, June.
    2. Giulio Cainelli & Eleonora Di Maria & Roberto Ganau, 2014. "An Explanation of Firms' Internationalisation Modes, Blending Firm Heterogeneity and Spatial Agglomeration: Microevidence from Italy," Environment and Planning A, , vol. 46(4), pages 943-962, April.
    3. Anna Maria Ferragina & Fernanda Mazzotta, 2014. "Agglomeration economies and global activities: impact on firm survival," ERSA conference papers ersa14p348, European Regional Science Association.
    4. Roberto Antonietti & Giulio Cainelli, 2011. "The role of spatial agglomeration in a structural model of innovation, productivity and export: a firm-level analysis," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 46(3), pages 577-600, June.
    5. Chiara Burlina, 2017. "Local Externalities and Firm Internationalisation," Tijdschrift voor Economische en Sociale Geografie, Royal Dutch Geographical Society KNAG, vol. 108(5), pages 592-604, October.
    6. Beaudry, Catherine & Schiffauerova, Andrea, 2009. "Who's right, Marshall or Jacobs? The localization versus urbanization debate," Research Policy, Elsevier, vol. 38(2), pages 318-337, March.
    7. Roberto Ganau & Eleonora Di Maria, 2014. "Determinants of technological innovation in SMEs. Firm-level factors, agglomeration economies and the role of KIBS providers," ERSA conference papers ersa14p820, European Regional Science Association.
    8. Anna Ferragina & Fernanda Mazzotta, 2015. "Agglomeration economies in Italy: impact on heterogeneous firms’ exit in a multilevel framework," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 42(4), pages 395-440, December.
    9. Giulio Cainelli & Eleonora Di Maria & Roberto Ganau, 2017. "Does Agglomeration Affect Exports? Evidence from Italian Local Labour Markets," Tijdschrift voor Economische en Sociale Geografie, Royal Dutch Geographical Society KNAG, vol. 108(5), pages 554-570, October.
    10. Oliver Farhauer & Alexandra Kröll, 2012. "Diversified specialisation—going one step beyond regional economics’ specialisation-diversification concept," Review of Regional Research: Jahrbuch für Regionalwissenschaft, Springer;Gesellschaft für Regionalforschung (GfR), vol. 32(1), pages 63-84, March.
    11. Park, Jeong-Il, 2020. "Industrial diversity in building units and factors associated with diversity: A case study of the Seoul Metropolitan Area," Research Policy, Elsevier, vol. 49(5).
    12. repec:elg:eechap:14395_12 is not listed on IDEAS
    13. Rosalia Castellano & Gaetano Musella & Gennaro Punzo, 2023. "Does context matter? Exploring the effects of productive structures on the relationship between innovation and workforce skills’ complementarity," Quality & Quantity: International Journal of Methodology, Springer, vol. 57(3), pages 1991-2011, June.
    14. Sergey Kadochnikov & Anna Fedyunina, 2013. "Export diversification in the product space and regional growth: Evidence from Russia," Papers in Evolutionary Economic Geography (PEEG) 1327, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Dec 2013.
    15. Matthias Firgo & Peter Mayerhofer, 2015. "Wissens-Spillovers und regionale Entwicklung - welche strukturpolitische Ausrichtung optimiert des Wachstum?," Working Paper Reihe der AK Wien - Materialien zu Wirtschaft und Gesellschaft 144, Kammer für Arbeiter und Angestellte für Wien, Abteilung Wirtschaftswissenschaft und Statistik.
    16. Aurélie LALANNE & Guillaume POUYANNE, 2012. "Ten years of metropolization in economics: a bibliometric approach (In French)," Cahiers du GREThA (2007-2019) 2012-11, Groupe de Recherche en Economie Théorique et Appliquée (GREThA).
    17. Frank Van Oort, 2013. "Agglomeration Economics Beyond the Specialisation-Diversity Controversy," Papers in Evolutionary Economic Geography (PEEG) 1313, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Aug 2013.
    18. Martijn J. Smit, 2017. "Innovation through new blood," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 58(3), pages 543-578, May.
    19. Liang, Jiaochen & Goetz, Stephan J., 2018. "Technology intensity and agglomeration economies," Research Policy, Elsevier, vol. 47(10), pages 1990-1995.
    20. Nielsen, Bo Bernhard & Asmussen, Christian Geisler & Weatherall, Cecilie Dohlmann, 2017. "The location choice of foreign direct investments: Empirical evidence and methodological challenges," Journal of World Business, Elsevier, vol. 52(1), pages 62-82.
    21. Sam Tavassoli & Nunzia Carbonara, 2014. "The role of knowledge variety and intensity for regional innovation," Small Business Economics, Springer, vol. 43(2), pages 493-509, August.

    More about this item

    Keywords

    Agglomeration; externalities; internationalisation;
    All these keywords.

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • 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:trn:utwpol:1114. See general information about how to correct material in RePEc.

    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: Francesco Rentocchini (email available below). General contact details of provider: https://edirc.repec.org/data/detreit.html .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.