Identifying Spatial Regimes of Economic Fragility through Spatially Constrained Clustering: Evidence from Italian Municipalities

Alessio Chiodin, Matteo Manera, Paolo Maranzano and Gianluca Monturano
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Alessio Chiodin: Fondazione Eni Enrico Mattei
Matteo Manera: Fondazione Eni Enrico Mattei and Department of Economics, Management and Statistics-DEMS, University of Milano-Bicocca
Paolo Maranzano: Fondazione Eni Enrico Mattei and Department of Economics, Management and Statistics-DEMS, University of Milano-Bicocca
Gianluca Monturano: Fondazione Eni Enrico Mattei and Department of Economics, Management and Business Law, University of Bari

No 2026.10, Working Papers from Fondazione Eni Enrico Mattei

Abstract: The COVID-19 pandemic generated highly heterogeneous economic effects across territories, reflecting differences in local production structures and spatial organization. This paper examines the geography of short-run economic fragility during the first wave of the pandemic by identifying spatially-coherent clusters of municipalities exposed to lockdown-induced shutdowns. Using municipal-level data on Italian suspended firms, workers, and value added in Spring 2020, we apply a Ward-like hierarchical clustering approach under spatial constraints that combines socio-economic dissimilarities with geographical proximity. We first analyze Lombardy, the region most severely affected during the initial phase, and then extend the analysis to the entire Italian territory. The results show that clustering based solely on socio-economic variables mainly reflects differences in economic scale, while incorporating spatial information reveals coherent territorial structures. Industrial and peripheral municipalities appear to be more exposed to shutdown measures than large service-oriented urban centers. At the national level, spatial partitions reproduce Italy’s hierarchical territorial structure, from the North–South divide to intermediate macro-regions. These findings highlight the role of spatially targeted policies and the importance of pre-existing territorial structures in shaping the economic impact of systemic shocks.

Keywords: COVID-19; Economic fragility; Spatial clustering; Spatial Econometrics (search for similar items in EconPapers)
JEL-codes: C38 D22 O18 R12 R15 (search for similar items in EconPapers)
Date: 2026-03
New Economics Papers: this item is included in nep-geo and nep-uep
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