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Identifying the Sources of Local Productivity Growth

Author

Listed:
  • Federico Cingano

    (Bank of Italy, Economic Research Department)

  • Fabiano Schivardi

    (Bank of Italy, Economic Research Department)

Abstract

Using firm-level based TFP indicators (as opposed to employment-based proxies) we estimate the effects of alternative sources of dynamic externalities at the local geographic level. Contrary to previous empirical work, we find that industrial specialization and scale indicators positively affect TFP growth at the city-industry level, while we do not find evidence that either the degree of local competition or productive variety impact on subsequent productivity growth. Employment-based regressions yield nearly the opposite results, in line with previous empirical work. We show that such regressions could suffer from serious identification problems when interpreted as evidence of dynamic externalities. This calls into question the conclusions of the existing literature on dynamic agglomeration economies.

Suggested Citation

  • Federico Cingano & Fabiano Schivardi, 2003. "Identifying the Sources of Local Productivity Growth," Temi di discussione (Economic working papers) 474, Bank of Italy, Economic Research and International Relations Area.
    • Handle: RePEc:bdi:wptemi:td_474_03
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    local growth; productivity; dynamic externalities;
    All these keywords.

    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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