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Spatial Agglomeration, Innovation and Firm Survival for Italian Manufacturing Firms

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  • Arnab Bhattacharjee
  • Ornella Maietta
  • Fernanda Mazzotta

Abstract

Innovativeness of a firm improves not only its own survival chances but can also generate externalities on its neighboring firms. We empirically examine the role of agglomeration economies in how innovativeness affects firm survival in Southern Italy, using spatial weights to model spillovers. Spatial Durbin probit model estimates confirm that innovation is a determinant of firm survival not only for firms that are themselves innovative but also ones located close to other innovative firms. Definition of spatial scale and weight plays an important role. Spillover benefits are enhanced by agglomeration economies, but only at a very local scale.

Suggested Citation

  • Arnab Bhattacharjee & Ornella Maietta & Fernanda Mazzotta, 2023. "Spatial Agglomeration, Innovation and Firm Survival for Italian Manufacturing Firms," National Institute of Economic and Social Research (NIESR) Discussion Papers 546, National Institute of Economic and Social Research.
    • Handle: RePEc:nsr:niesrd:546
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    More about this item

    Keywords

    Firm survival; Spatial models; Innovation; Spillovers; Southern Italian SMEs;
    All these keywords.

    JEL classification:

    • L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies

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