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Spatial agglomeration, global value chains, and productivity: micro-evidence from Italy and Spain

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  • Cainelli, Giulio
  • Ganau, Roberto
  • Giunta, Anna

Abstract

We investigate the relationship between spatial agglomeration and firms’ labor productivity in Italy and Spain, examining firm-level heterogeneity in Global Value Chain positioning. We analyze a sample of 4, 025 manufacturing firms during the period from 2010 to 2014 and employ a shift-share instrumental variable approach. We find that agglomeration has a positive effect on labor productivity for suppliers but not for final firms.

Suggested Citation

  • Cainelli, Giulio & Ganau, Roberto & Giunta, Anna, 2018. "Spatial agglomeration, global value chains, and productivity: micro-evidence from Italy and Spain," LSE Research Online Documents on Economics 87912, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:87912
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    1. de Blasio, Guido & Maggio, Giuseppe & Menon, Carlo, 2016. "Down and out in Italian towns: Measuring the impact of economic downturns on crime," Economics Letters, Elsevier, vol. 146(C), pages 99-102.
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    3. Duranton, Gilles & Puga, Diego, 2004. "Micro-foundations of urban agglomeration economies," Handbook of Regional and Urban Economics, in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 48, pages 2063-2117, Elsevier.
    4. Timothy J. Bartik, 1991. "Who Benefits from State and Local Economic Development Policies?," Books from Upjohn Press, W.E. Upjohn Institute for Employment Research, number wbsle.
    5. Faggio, Giulia & Overman, Henry, 2014. "The effect of public sector employment on local labour markets," Journal of Urban Economics, Elsevier, vol. 79(C), pages 91-107.
    6. Accetturo, Antonio & Giunta, Anna, 2018. "Value chains and the great recession: Evidence from Italian and German firms," International Economics, Elsevier, vol. 153(C), pages 55-68.
    7. Daniel J. Graham & Patricia S. Melo & Piyapong Jiwattanakulpaisarn & Robert B. Noland, 2010. "Testing For Causality Between Productivity And Agglomeration Economies," Journal of Regional Science, Wiley Blackwell, vol. 50(5), pages 935-951, December.
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    Cited by:

    1. A. Giunta & P. Montalbano & S. Nenci, 2022. "Consistency of micro- and macro-level data on global value chains: Evidence from selected European countries," International Economics, CEPII research center, issue 171, pages 130-142.
    2. Cainelli, Giulio & Ganau, Roberto & Giunta, Anna, 2022. "Business groups, institutions, and firm performance," LSE Research Online Documents on Economics 114553, London School of Economics and Political Science, LSE Library.
    3. Bhushan P Jangam & Vaseem Akram, 2019. "Does participation in global value chain foster export concentration?," Economics Bulletin, AccessEcon, vol. 39(4), pages 2913-2920.
    4. Lei Luo & Zhenhua Zheng & Jing Luo & Yuqiu Jia & Qi Zhang & Chun Wu & Yifeng Zhang & Jia Sun, 2020. "Spatial Agglomeration of Manufacturing in the Wuhan Metropolitan Area: An Analysis of Sectoral Patterns and Determinants," Sustainability, MDPI, vol. 12(19), pages 1-23, September.
    5. Dong Feng & Jian Li & Xintao Li & Zaisheng Zhang, 2019. "The Effects of Urban Sprawl and Industrial Agglomeration on Environmental Efficiency: Evidence from the Beijing–Tianjin–Hebei Urban Agglomeration," Sustainability, MDPI, vol. 11(11), pages 1-12, May.
    6. Wenxiao WANG & Shandre THANGAVELU, 2024. "Urban Agglomeration, Firm Performance, and Global Value Chain in China," Working Papers DP-2024-14, Economic Research Institute for ASEAN and East Asia (ERIA).
    7. Chenxi Li & Kening Wu & Xiangyu Gao, 2020. "Manufacturing industry agglomeration and spatial clustering: Evidence from Hebei Province, China," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 22(4), pages 2941-2965, April.
    8. Nenci, Silvia & Fusacchia, Ilaria & Giunta, Anna & Montalbano, Pierluigi & Pietrobelli, Carlo, 2022. "Mapping global value chain participation and positioning in agriculture and food: stylised facts, empirical evidence and critical issues," Bio-based and Applied Economics Journal, Italian Association of Agricultural and Applied Economics (AIEAA), vol. 11(2), July.
    9. Upalat Korwatanasakul & Tran Thi Hue, 2022. "Global Value Chain Participation and Labour Productivity in Manufacturing Firms in Viet Nam: Firm-Level Panel Analysis," Working Papers DP-2022-34, Economic Research Institute for ASEAN and East Asia (ERIA).
    10. Bhushan Praveen Jangam & Badri Narayan Rath, 2021. "Do global value chains enhance or slog economic growth?," Applied Economics, Taylor & Francis Journals, vol. 53(36), pages 4148-4165, August.
    11. Dolores Añon Higón & Ionnanis Bournakis, 2024. "Global Value Chains (GVCs) participation and Markups," Working Papers 2403, Department of Applied Economics II, Universidad de Valencia.

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    More about this item

    Keywords

    Agglomeration; Firm Productivity; Global Value Chain; Italy; Spain;
    All these keywords.

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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