This paper is concerned with spatial agglomeration across industrial sectors in Italy. Following the seminal article by Ellison and Glaeser, agglomeration indexes that simultaneously control for the effect of chance and size structure of industries are presented. In particular, I compute agglomeration across 100 industrial manufacturing sectors in Italy in 1996. The empirical evidence shows that for an overwhelmingly majority of sectors centripetal forces prevail over centrifugal ones. In a regression analysis, I also look at the determinants of agglomeration across sectors. Consistently with the literature on urban economics, I find that agglomeration is fostered by both the human capital intensity of a sector and its propensity to innovate. On the contrary, transportation costs per chilometer and the usage of land as production factor act as forces of dispersion. I conclude that industries where information spillovers are more relevant tend to be more agglomerated than the others. The negative influence of transportation costs on agglomeration implies that falling trade barriers between regions may lead to more geographic concentration of the economic activities.
Published in 2003 in: Rivista di Politica Economica, v. 93, 3-4, serie 3, pp. 149-196
