Knowledge Intensive Business Services and Urban Areas: An Analysis of Localization and Productivity on Italian Data

36 Pages Posted: 9 Jul 2019

Date Written: July 20, 2018

Abstract

We analyse the geographic localization and the productivity of knowledge-intensive business services (KIBS) in Italy, using both census data and balance-sheet data at the firm level. We find that KIBS are generally agglomerated in urban areas where they attain significantly higher labour productivity levels. Urban productivity advantages are found to be strongly associated with the local availability of human capital and to standard proxies of Marshall-Arrow-Romer and Jacobs agglomeration economies. Forward demand linkages and some factors impacting on the thickness of the local labour market also appear to be relevant. On the whole, the set of explanatory factors considered could explain the entire urban productivity premium estimated for Italian KIBS firms.

Keywords: knowledge-intensive business services (KIBS), urban areas, agglomeration economies

JEL Classification: J24, L84, R30

Suggested Citation

Di Giacinto, Valter and Micucci, Giacinto and Tosoni, Alessandro, Knowledge Intensive Business Services and Urban Areas: An Analysis of Localization and Productivity on Italian Data (July 20, 2018). Bank of Italy Occasional Paper No. 443, July 2018. Available at SSRN: https://ssrn.com/abstract=3211841 or http://dx.doi.org/10.2139/ssrn.3211841

Valter Di Giacinto

Bank of Italy ( email )

Via Nazionale 91
Rome, 00184
Italy

Giacinto Micucci (Contact Author)

Bank of Italy ( email )

Via Nazionale 91
Rome, 00184
Italy

Alessandro Tosoni

Bank of Italy ( email )

Via Nazionale 91
Rome, 00184
Italy

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