Place-based industrial policies and local agglomeration in the long run

Lorenzo Incoronato () and Salvatore Lattanzio

No 1503, Temi di discussione (Economic working papers) from Bank of Italy, Economic Research and International Relations Area

Abstract: This paper estimates the long-run effects of place-based industrial policy, studying a program implemented in Italy in the 1960s and 1970s. Leveraging administrative data over a century and exogenous variation in the assignment rules, we document agglomeration of workers and firms in the targeted clusters lasting well beyond the policy's termination. By promoting high-technology industries, the intervention spurred demand for business services and fostered a skilled local workforce. Over time, this produced spillovers from manufacturing to knowledge-intensive services, with sustained gains in local wages and human capital. We illustrate how these persistent effects depended on the initial conditions of host locations.

Keywords: place-based industrial policy; employment; wages; agglomeration (search for similar items in EconPapers)
JEL-codes: J24 N94 O14 O25 R58 (search for similar items in EconPapers)
Date: 2025-11
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Related works:
Working Paper: Place-Based Industrial Policies and Local Agglomeration in the Long Run (2024)
Working Paper: Place-Based Industrial Policies and Local Agglomeration in the Long Run (2024)
Working Paper: Place-Based Industrial Policies and Local Agglomeration in the Long Run (2024)
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Persistent link: https://EconPapers.repec.org/RePEc:bdi:wptemi:td_1503_25

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