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Identifying the Sources of Local Productivity Growth

Author

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  • Federico Cingano

    (Bank of Italy)

  • Fabiano Schivardi

    (Bank of Italy)

Abstract

Using firm-level based TFP indicators (as opposed to employment-based proxies) we esti-mate the effects of alternative sources of dynamic externalities at the local level. In contrast to previous empirical work, we find that industrial specialization and scale indicators affect TFP growth positively, while neither product variety nor the degree of local competition have any effect. Employment-based regressions yield nearly the opposite results, in line with most of previous empirical work. We argue that such regressions suffer from serious identifica-tion problems when interpreted as evidence of dynamic externalities. Our results question the conclusions of most of the existing literature on dynamic agglomeration economies. (JEL: R11, O47) Copyright (c) 2004 The European Economic Association.

Suggested Citation

  • Federico Cingano & Fabiano Schivardi, 2004. "Identifying the Sources of Local Productivity Growth," Journal of the European Economic Association, MIT Press, vol. 2(4), pages 720-742, June.
    • Handle: RePEc:tpr:jeurec:v:2:y:2004:i:4:p:720-742
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    JEL classification:

    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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