Productivity and earnings at the firm-plant level: the case of Lombardy’s urban and non-urban agglomerations

Maurizio Luigi Baussola, Eleonora Bartoloni

Research output: Contribution to journalArticlepeer-review

Abstract

We analyse business performance by using a unique data set of the universe of Italian local business units. We investigate the pattern of both productivity and profitability by adopting a decomposition technique to document spatial variation across urban and non-urban areas. Aggregate evidence indicates that an urban–non-urban productivity divide exists, but this premium vanishes with respect to profitability. Plant-level estimations using a hierarchical linear model show that area attractiveness positively affects productivity, whereas diseconomies of agglomeration negatively affect profitability. Coping with agglomeration costs is a priority for regional policies to transfer the productivity gains in urban areas into new investment and growth opportunities.
Original languageEnglish
Pages (from-to)1-22
Number of pages22
JournalSpatial Economic Analysis
DOIs
Publication statusPublished - 2020

Keywords

  • Lombardy region
  • decomposition analysis
  • firm performance
  • hierarchical linear model
  • local agglomeration

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