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Are Italian firms performances influenced by innovation of domestic and foreign firms nearby in space and sectors?

Anna Ferragina () and Giulia Nunziante ()
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Giulia Nunziante: University of Roma 2 “Tor Vergata”

Economia e Politica Industriale: Journal of Industrial and Business Economics, 2018, vol. 45, issue 3, 335-360

Abstract: Abstract This paper aims to address three main issues. First, we investigate the relevance of spatial total factor productivity (TFP) spillovers determined by firm closeness in the Italian Local Labour Systems (LLS) of Textile. Secondly, we assess the relevance in these locations of TFP premia deriving from firm innovation, taking into account spatial and sectoral innovation. Then, we question how far spatial productivity spillovers and TFP premia spur from innovation of foreign and domestic multinationals located in the LLSs. To this purpose, we use a panel of Italian manufacturing firms for 2007 and 2010 (AIDA data) and focus on 18 Made in Italy LLS of Textile. We employ a spatial econometric approach (spatial autoregressive and spatial error models) by using the geographical coordinates at firm level. We find strong productivity spillovers at spatial level and a relevant impact of innovation on firm productivity. Evidence is also found of a positive impact of intra-sectoral innovation and from concentration of foreign firms innovation in the LLSs.

Keywords: Multifactor productivity; Technological change; Spatial models; Size and spatial distributions of regional economic activity; Multinational firms (search for similar items in EconPapers)
JEL-codes: D24 O33 C21 R12 F23 (search for similar items in EconPapers)
Date: 2018
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Economia e Politica Industriale: Journal of Industrial and Business Economics is currently edited by C. Cambini, M.G. Colombo, L. Piscitello, L. Rondi and A. Zanfei

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Handle: RePEc:spr:epolin:v:45:y:2018:i:3:d:10.1007_s40812-018-0090-4