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Spatial Externalities and Local Economic Growth

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  • Sonia Deidda
  • Raffaele Paci

    ()

  • Stefano Usai

    ()

Abstract

The growing interest on the economic geography issues has provided new vigour to the research efforts aiming at explaining economic phenomena without neglecting space. In particular several studies have focused on the role of spatially bounded externalities on firms agglomeration processes at the local industry level. The main objective of this paper is to assess the role of a large set of potential determinants of the process of local agglomeration of economic activity and also to analyse the issue of spatial association of the local growth process. We focus on the case of Italy making use of a very ample database on socio-economic indicators for 784 Local Labour Systems and 34 sectors over the period 1991-96. Our database cover both the manufacturing and the service sectors so that the whole economic system is considered. Our econometric results show that local growth in Italy is not a homogeneous process. On the contrary, it is characterized by significant differences across macro regions and sectors with respect to the relevance of the explanatory factors. Among the most important determinants of local industry growth, it is worth mentioning the positive role of the diversity externalities. We also find robust evidence of the negative influence of specialisation externalities on labour dynamics at the local industry level. Moreover, we have assessed the effects of other determinants of local growth like human capital, social environment and network externalities. Finally, the spatial analysis shows that in the aggregate economy and also in some sectors there is the presence of spatial autocorrelation and therefore dynamic spatial models have been estimated.

Suggested Citation

  • Sonia Deidda & Raffaele Paci & Stefano Usai, 2003. "Spatial Externalities and Local Economic Growth," ERSA conference papers ersa03p81, European Regional Science Association.
  • Handle: RePEc:wiw:wiwrsa:ersa03p81
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    Cited by:

    1. 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.
    2. Christ, Julian P., 2009. "New Economic Geography reloaded: Localized knowledge spillovers and the geography of innovation," FZID Discussion Papers 01-2009, University of Hohenheim, Center for Research on Innovation and Services (FZID).
    3. Rafael Boix & Joan Trullén, 2007. "Knowledge, networks of cities and growth in regional urban systems," Papers in Regional Science, Wiley Blackwell, vol. 86(4), pages 551-574, November.
    4. Francesca Mameli & Simona Iammarino & Ron Boschma, 2012. "Regional variety and employment growth in Italian labour market areas: services versus manufacturing industries," Papers in Evolutionary Economic Geography (PEEG) 1203, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Feb 2012.
    5. 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.
    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. Francesca Mameli & Alessandra Faggian & Philip McCann, 2008. "Employment Growth in Italian Local Labour Systems: Issues of Model Specification and Sectoral Aggregation," Spatial Economic Analysis, Taylor & Francis Journals, vol. 3(3), pages 343-360.
    8. Rafael Boix & Joan Trullén, 2004. "Knowledge, networks of cities and growth in regional urban systems: theory, measurement and policy implications," ERSA conference papers ersa04p85, European Regional Science Association.
    9. repec:wfo:wstudy:58342 is not listed on IDEAS
    10. repec:eee:regeco:v:68:y:2018:i:c:p:260-267 is not listed on IDEAS
    11. Illy, Annette & Hornych, Christoph & Schwartz, Michael & Rosenfeld, Martin T. W., 2009. "Urban Growth in Germany – The Impact of Localization and Urbanization Economies," IWH Discussion Papers 19/2009, Halle Institute for Economic Research (IWH).
    12. Zouaghi, Ferdaous & Hirsch, Stefan & Garcia, Mercedes Sanchez, 2016. "What Drives Firm Profitability? A Multilevel Approach To The Spanish Agri-Food Sector," 56th Annual Conference, Bonn, Germany, September 28-30, 2016 244762, German Association of Agricultural Economists (GEWISOLA).
    13. Luciana Lazzeretti & Francesco Capone, 2008. "Spatial Spillovers and Employment Dynamics in Local Tourist Systems in Italy (1991--2001)," European Planning Studies, Taylor & Francis Journals, vol. 17(11), pages 1665-1683, July.
    14. Paul Bishop, 2006. "Spatial spillovers and employment growth in the service sector," The Service Industries Journal, Taylor & Francis Journals, vol. 29(6), pages 791-803, July.
    15. Paul Bishop & Peter Gripaios, 2010. "Spatial Externalities, Relatedness and Sector Employment Growth in Great Britain," Regional Studies, Taylor & Francis Journals, vol. 44(4), pages 443-454.
    16. G. Marletto, 2006. "La politica dei trasporti come politica per l'innovazione: spunti da un approccio evolutivo," Working Paper CRENoS 200605, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
    17. OA Carboni & G. Medda, 2007. "Government Size and the Composition of Public Spending in a Neoclassical Growth Model," Working Paper CRENoS 200701, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.

    More about this item

    JEL classification:

    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General

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