Spatial agglomeration and productivity in Italy: A panel smooth transition regression approach

Abstract

The paper analyses the nonlinearities in the impact of localization, diversity, urbanization and competition on firm-level total factor productivity (TFP), using a large sample of Italian firms from 1999 to 2007. We adopt a panel smooth transition regression model, so that the TFP elasticities are free to vary smoothly across two or more extreme values. Results show that localization economies and Jacobian externalities materialize only for values of, respectively, intra-industry agglomeration and extra-sectoral diversity above a certain threshold. Local competition exerts a positive effect on productivity, even though the marginal impact shrinks at high levels of competition. We find instead no evidence of diseconomies of agglomeration.JEL classification: C23, C24, D24, R12, R15

Variety, economic growth and knowledge intensity of European regions: a spatial panel analysis

“…In other words, while cognitive proximity clearly facilitates knowledge spillovers and new product development, it has been argued that it is through the recombination of knowledge from unrelated sectors that radical innovation occurs (Cainelli et al 2014). Building on this, it should be expected that unrelated variety can have a positive effect on employment growth, and not only a negative effect on unemployment growth as suggested by Frenken et al (2007).…”

Why Cities Emerge and Grow? Explanations of Theoretical and Empirical Studies

“…Оценки производитель-ности труда показали существенное преимущество города по сравнению со средними характеристиками для стран ОЭСР (Ahrend, Farchy, Kaplanis, Lembcke, 2017), Японии , Италии (Cainelli, Fracasso, Marzetti, 2015), Западной Европы (Ciccone, 1996;Ciccone, 2002;, Восточной Европы (Békés, Harasztosi, 2013;Bruhart, Mathys, 2008) и России (Гордеев, Магомедов, Михайлова, 2017; Изотов, 2017; Коло-мак, 2011; Коломак, 2015; Русановский, Марков, 2015). Анализ предприятий Швейцарии выявил географические факторы риска банкротства, большую устойчивость демонстрируют фирмы, расположенные в центре городских агломераций (Buehler, Kaiser, Jaeger, 2012).…”

How Urbanization Economies Impact TFP of R&D Performers: Evidence from China

“…While localization economies receive earlier research attention, since the original contributions of Marshall (1920) [12] and Weber (1929) [13], more and more contributions have been made to urbanization economies [14,15] since the seminal work of Hoover (1937) [16]. Regarding the corresponding academic analysis, how urbanization economies impact firm productivity has been the object of intense theoretical and empirical research [17]. However, most current studies are from developed countries, while the evidence from developing countries is relatively scant.…”

“…On the other hand, urbanization economies can also negatively impact firm productivity, stemming from the diseconomies of agglomeration (such as, congestion effects) [17,24]. Congestion effects exist since factor costs (e.g., land, transportation, and labor) can be increased largely when too many firms agglomerate in one particular area [26][27][28].…”

“…For example, Jofre-Monseny et al (2014) [7] explains the distribution and reason not only for urbanization economies but also for localization economies in Spain at micro-firm level. Cainelli et al (2014) [17] adopts a panel smooth transition regression model for exploring agglomeration economies' impact on TFP of Italian firms from 1999 to 2007. They find that urbanization economies positively impact firm productivity in Italy only when it exceeds a certain threshold.…”