Productivity and earnings at the firm-plant level: the case of Lombardy’s urban and non-urban agglomerations
Eleonora Bartoloni and
Maurizio Baussola ()
Spatial Economic Analysis, 2021, vol. 16, issue 3, 333-354
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.
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Persistent link: https://EconPapers.repec.org/RePEc:taf:specan:v:16:y:2021:i:3:p:333-354
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