Giorgio Fagiolo

Giorgio Fagiolo

Industrial Dynamics


My research on industrial dynamics has been focusing so far on two main topics:


  1. Industrial agglomeration and spatial concentration. This project aims at explaining the observed across-industry heterogeneity of firm geographical concentration. We employ a simple stochastic model based on Polya-Urn schemes where firms repeatedly choose their location. Their choice is affected by both some measure of the comparative advantage of the location, and the number of firms that are present in each location. The model can be analytically solved and delivers testable implications about the location distributions of firms belonging to different sectors. Implications can be tested against country-based data. Work in progress include the analysis of alternative formulations of the model, as well as empirical applications, such testing the model against alternative available databases.

  2. The impact of financial structure on firm size and growth dynamics. Standard empirical investigations of the determinants of firm growth have typically tested Gibrat-like equations, where firm growth is related to its size and age. This project tries instead to explore the extent to which the financial structure of the firm (e.g., its liquidity constraints, its debt structure, etc.) also affect the growth process through investment decisions. To that end, we apply standard panel-data tools and distributional analyses to large firm-level databases recording for each firm its production, employment and financial profile.


Selected Publications


  1. Giannangeli, S., Fagiolo, G. and Molinari, M. (2008), "Financial Structure and Corporate Growth: Evidence from Italian Panel Data", LEM Working Paper, 2008/17. [Get a PDF version]

  2. Bottazzi, G., Dosi, G., Fagiolo, G. and Secchi, A. (2008), "Sectoral and Geographical Specificities in the Spatial Structure of Economic Activities", Structural Change and Economic Dynamics, 19: 189-202.

  3. Bottazzi, G., Dosi, G., Fagiolo, G. and Secchi, A. (2007), "Modeling Industrial Evolution in Geographical Space", Journal of Economic Geography, 7: 651-672.

  4. Fagiolo, G. and Luzzi, A. (2006), "Do Liquidity Constraints Matter in Explaining Firm Size and Growth? Some Preliminary Evidence on the Italian Manufacturing Industry", Industrial and Corporate Change, 15, 1: 1-39.

  5. Bottazzi, G., Dosi, G. and Fagiolo, G. (2006), "On Sectoral Specificities in the Geography of Corporate Location", in Breschi, S. and Malerba, F. (Eds.), Clusters, networks and innovation, Oxford, U.K., Oxford University Press.