Mapping Local Productivity Advantages in Italy: Industrial Districts, Cities or Both?

61 Pages Posted: 29 Mar 2012

Multiple version iconThere are 2 versions of this paper

Date Written: January 26, 2012

Abstract

We compare the magnitude of local productivity advantages associated with two different spatial concentration patterns in Italy – urban areas and industrial districts. The former have high population density and host a wide range of economic activities, while the latter are marked by a high concentration of small firms producing relatively homogenous goods. Using data from a large sample of Italian manufacturing firms observed over the 1995-2006 period, we detect local productivity advantages for both urban areas and industrial districts. However, firms located in urban areas reap a larger productivity premium than those operating within districts. The advantages of industrial districts have declined over time; those of urban areas have remained stable. Differences in the composition of firm employees between white- and blue-collars explain a small fraction of the urban productivity premium. The quantile regressions show how more productive firms gain larger benefits by locating in urban areas. Our analysis raises the question of whether Italian industrial districts are less fit than urban areas to prosper in a world characterized by advancing globalization and the growing use of ICT.

Keywords: urban areas, industrial districts, agglomeration economies, productivity, white- and blue-collars, Italian economy

JEL Classification: C52, D24, R12

Suggested Citation

Di Giacinto, Valter and Gomellini, Matteo and Micucci, Giacinto and Pagnini, Marcello, Mapping Local Productivity Advantages in Italy: Industrial Districts, Cities or Both? (January 26, 2012). Bank of Italy Temi di Discussione Working Paper No. 850. Available at SSRN: https://ssrn.com/abstract=2030789 or http://dx.doi.org/10.2139/ssrn.2030789

Valter Di Giacinto

Bank of Italy ( email )

Via Nazionale 91
Rome, 00184
Italy

Matteo Gomellini (Contact Author)

Bank of Italy ( email )

Via Nazionale 91
Rome, 00184
Italy

Giacinto Micucci

Bank of Italy ( email )

Via Nazionale 91
Rome, 00184
Italy

Marcello Pagnini

Bank of Italy ( email )

Via Nazionale 91
Rome, 00184
Italy

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