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Mapping Local Productivity Advantages In Italy: Industrial Districts, Cities Or Both?

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  • Marcello Pagnini
  • Valter Di Giacinto

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  • Giacinto Micucci
  • Matteo Gomellini

Abstract

In this paper we compare the magnitude of local productivity advantages associated to two different spatial concentration patterns in Italy, i.e. urban areas (UA) and industrial districts (ID). UA typically display a huge concentration of population and host a wide range of economic activities, while ID are located outside UA and exhibit a strong concentration of small firms producing relatively homogenous goods. We use a very large sample of Italian manufacturing firms observed over the 1995-2006 period and resort to a wide set of econometric techniques in order to test the robustness of main empirical findings. We detect local productivity advantages for both UA and ID. However, firms located in UA attain a larger Total Factor Productivity (TFP) premium than those operating within ID. Besides, it turns out that the advantages of ID have declined over time, while those of UA remained stable. Differences in the white-blue collars composition of the local labor force appear to explain only a minor fraction of the estimated spatial TFP differentials. Production workers (blue collars) turn out to be more productive in ID, while non-production workers (white collars) are more efficiently employed in UA. By analyzing the quantiles of the sample TFP distribution, we document how higher average TFP levels within UA do not seem to be mainly driven by a selection effect pushing less efficient firms out of the market. Rather, a firm sorting effect appears to stand out, suggesting that more productive firms gain strong benefits from locating in UA. On the whole, our analysis raises the question whether Italian ID are less fit than UA to prosper in a changing world, characterized by increased globalization and by the growing use of information technologies.

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  • Marcello Pagnini & Valter Di Giacinto & Giacinto Micucci & Matteo Gomellini, 2011. "Mapping Local Productivity Advantages In Italy: Industrial Districts, Cities Or Both?," ERSA conference papers ersa11p1806, European Regional Science Association.
  • Handle: RePEc:wiw:wiwrsa:ersa11p1806
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    Cited by:

    1. Combes, Pierre-Philippe & Gobillon, Laurent, 2015. "The Empirics of Agglomeration Economies," Handbook of Regional and Urban Economics, Elsevier.
    2. Marc Deloof & Maurizio Rocca, 2015. "Local financial development and the trade credit policy of Italian SMEs," Small Business Economics, Springer, vol. 44(4), pages 905-924, April.
    3. Giovannetti, Giorgia & Marvasi, Enrico, 2016. "Food exporters in global value chains: Evidence from Italy," Food Policy, Elsevier, vol. 59(C), pages 110-125.
    4. Giorgio Fazio & Enza Maltese, 2015. "Agglomeration Externalities and the Productivity of Italian Firms," Growth and Change, Wiley Blackwell, vol. 46(3), pages 354-378, September.
    5. Carlos Carreira & Luís Lopes, 2016. "Collecting new pieces to the regional knowledge spillovers puzzle: high-tech versus low-tech industries," GEMF Working Papers 2016-06, GEMF, Faculty of Economics, University of Coimbra.
    6. Giorgia Giovannetti & Enrico Marvasi & Marco Sanfilippo, 2015. "Supply chains and the internationalization of small firms," Small Business Economics, Springer, vol. 44(4), pages 845-865, April.
    7. Ana Gouveia & Sílvia Santos & Marli Fernandes, 2017. "The empirics of agglomeration economies: the link with productivity," GEE Papers 0067, Gabinete de Estratégia e Estudos, Ministério da Economia, revised Feb 2017.
    8. Ganau, Roberto & Rodr�guez-Pose, Andr�s, 2017. "Industrial Clusters, Organized Crime and Productivity Growth in Italian SMEs," CEPR Discussion Papers 12140, C.E.P.R. Discussion Papers.
    9. Roberto BASILE & Cristiana DONATI & Rosanna PITTIGLIO, 2013. "Industry Structure And Employment Growth: Evidence From Semiparametric Geoadditive Models," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 38, pages 121-160.
    10. Anna Maria Ferragina & Fernanda Mazzotta, 2014. "Agglomeration economies and global activities: impact on firm survival," ERSA conference papers ersa14p348, European Regional Science Association.
    11. repec:spr:anresc:v:59:y:2017:i:1:d:10.1007_s00168-017-0830-9 is not listed on IDEAS
    12. Arimoto, Yutaka & Nakajima, Kentaro & Okazaki, Tetsuji, 2014. "Sources of productivity improvement in industrial clusters: The case of the prewar Japanese silk-reeling industry," Regional Science and Urban Economics, Elsevier, vol. 46(C), pages 27-41.
    13. Roberto Basile & Cristiana Donati & Rosanna Pittiglio & Maria Savarese, 2015. "Dinamiche dell’occupazione e struttura produttiva locale in Italia," SCIENZE REGIONALI, FrancoAngeli Editore, vol. 2015(2), pages 33-68.
    14. 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.
    15. Luigi Cannari, 2011. "Networks of Firms and Local Territory: A Comment," QA - Rivista dell'Associazione Rossi-Doria, Associazione Rossi Doria, issue 4, December.
    16. Jorge Balat & Camila Casas, 2018. "Firm Productivity and Cities: The Case of Colombia," Borradores de Economia 1032, Banco de la Republica de Colombia.
    17. Frank Giarratani & Geoffrey J.D. Hewings & Philip McCann (ed.), 2013. "Handbook of Industry Studies and Economic Geography," Books, Edward Elgar Publishing, number 3542.
    18. Fiorenza Belussi & Lisa De Propris, 2013. "They are industrial districts, but not as we know them!," Chapters,in: Handbook of Industry Studies and Economic Geography, chapter 20, pages 479-492 Edward Elgar Publishing.
    19. Antonio Accetturo & Valter Di Giacinto & Giacinto Micucci & Marcello Pagnini, 2013. "Geography, productivity and trade: does selection explain why some locations are more productive than others?," Temi di discussione (Economic working papers) 910, Bank of Italy, Economic Research and International Relations Area.
    20. Brunello, Giorgio & Langella, Monica, 2014. "Local Agglomeration, Entrepreneurship and the Great Recession: Evidence from Italian Industrial Districts," IZA Discussion Papers 8331, Institute for the Study of Labor (IZA).
    21. Pierre-Philippe Combes & Laurent Gobillon, 2014. "The Empirics of Agglomeration Economies," Working Papers halshs-01071761, HAL.
    22. Sabrina Iommi, 2016. "Città medie e nuove politiche di sviluppo," SCIENZE REGIONALI, FrancoAngeli Editore, vol. 2016(2), pages 5-14.
    23. Giorgia Giovannetti & Enrico Marvasi & Marco Sanfilippo, 2013. "Supply Chains and the Internalization of SMEs: Evidence from Italy," Working Papers - Economics wp2013_30.rdf, Universita' degli Studi di Firenze, Dipartimento di Scienze per l'Economia e l'Impresa.
    24. Claudio Berardino & Giuseppe Mauro & Davide Quaglione & Alessandro Sarra, 2016. "Industrial Districts and Socio-economic Well-Being: An Investigation on the Italian Provinces Disparities," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 129(1), pages 337-363, October.

    More about this item

    JEL classification:

    • C52 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Evaluation, Validation, and Selection
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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