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When agglomeration meets complexity: unequal gains across Italian provinces

Author

Listed:
  • Cirillo, Valeria
  • Divella, Marialuisa
  • Ferrulli, Eustachio
  • Simone, Giuseppe

Abstract

This paper examines how agglomeration and economic complexity jointly shape income inequality across Italian provinces. Using panel data for 103 provinces over 2000-2021, we combine measures of local agglomeration and economic complexity with tax-based indicators of income polarisation. The results show that agglomeration is associated with wider income disparities, reflecting stronger gains at the top of the distribution and weaker outcomes at the bottom. However, complexity significantly moderates this relationship, reducing the inequality-enhancing effects of agglomeration. The findings suggest that the distributional consequences of agglomeration depend on the level of sophistication of local productive structures.

Suggested Citation

  • Cirillo, Valeria & Divella, Marialuisa & Ferrulli, Eustachio & Simone, Giuseppe, 2026. "When agglomeration meets complexity: unequal gains across Italian provinces," GLO Discussion Paper Series 1805, Global Labor Organization (GLO).
  • Handle: RePEc:zbw:glodps:1805
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    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)
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • C24 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Truncated and Censored Models; Switching Regression Models; Threshold Regression Models

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