Do Agglomeration Externalities Enhance Regional Performances in Production Process? A Stochastic Frontier Approach

Massimiliano Agovino and Agnese Rapposelli
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Agnese Rapposelli: Università “G.d’Annunzio” di Chieti-Pescara

Chapter 7 in Geographical Labor Market Imbalances. Recent Explanations and Cures, 2015, pp 143-166 from AIEL - Associazione Italiana Economisti del Lavoro

Abstract: The aim of the present work is to estimate an aggregate production function for the 20 Italian regions by emphasizing the role that agglomeration externalities (localization externalities and urbanization externalities) and spatial spillovers have in influencing the technical efficiency of the production process. To this purpose, we use the stochastic frontier approach. The results highlight the relevance and the positive impact that localization and urbanization externalities have in improving the efficiency level of the production process of Northern and Central Italian regions. Furthermore, spatial spillovers represent a source of development and growth for Northern, Central, and Southern regions. In particular, after considering spatial spillovers, we observe a reduction of the concentration and an increase of the diffusion process of efficiency among Italian regions. For some Northern and Central regions, we can observe that there are some richer regions and some poorer regions with regard to their capability to benefit from spatial spillovers.

Keywords: Agglomeration externalities; Spatial spillovers; Stochastic frontier; Technical efficiency; Italian regions; Spatial correlation (search for similar items in EconPapers)
JEL-codes: C2 D24 O1 R10 (search for similar items in EconPapers)
Date: 2015
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Chapter: Do Agglomeration Externalities Enhance Regional Performances in Production Process? A Stochastic Frontier Approach (2015)
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