|LEM Working Paper Series
Cities and clusters: economy-wide and sector-specific effects in corporate location
Giulio Bottazzi, Ugo Gragnolati
Industrial Location, Sector-specific Agglomeration, Urbanization Economy, Maximum Likelihood Estimation
L1, C31, R3
Are the observed spatial distributions of firms decided mostly by market-mediated, economy-wide locational forces, or rather by non-pecuniary, sector-specific ones? This work finds that the latter kind of forces weight systematically more than the former in deciding firm location. The analysis uses Italian data on a variety of manufacturing and service sectors spatially disaggregated at the level of Local Labor Systems.