Cities and clusters: economy-wide and sector-specific effects in corporate location

Bottazzi, Giulio;Gragnolati, Ugo Maurizio

2015-01-01

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Abstract

Are the observed spatial distributions of firms decided mostly by economy-wide urbanization economies or rather by sector-specific localization economies? This paper 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 labour market areas.