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Local agglomeration, entrepreneurship and the 2008 recession: evidence from Italian industrial districts

Brunello, Giorgio and Langella, Monica (2016) Local agglomeration, entrepreneurship and the 2008 recession: evidence from Italian industrial districts. Regional Science and Urban Economics, 58. pp. 104-114. ISSN 0166-0462

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Identification Number: 10.1016/j.regsciurbeco.2016.03.004

Abstract

We investigate whether the impact of recessions on entrepreneurship is affected by the presence of industrial districts, a source of local agglomeration economies. Using Italian Labour Force quarterly data from 2006 to 2011 and a "difference-in-differences" approach, we show that the share of entrepreneurs in local labour markets where industrial districts are present has declined more than in comparable areas after the beginning of the 2008 recession. The estimated negative differential effect ranges between 4.8 and 7.9 percent in absolute value. We examine alternative explanations - including differences in industrial specialisation and composition, access to credit propensity, exports, population density and the composition of talents - and conclude that our result is consistent with the intense social interactions typical of industrial districts, acting as a multiplier that amplifies the response to shocks.

Item Type: Article
Official URL: http://www.sciencedirect.com/science/journal/01660...
Additional Information: © 2016 Elsevier B.V.
Divisions: Centre for Economic Performance
Subjects: H Social Sciences > HB Economic Theory
Sets: Research centres and groups > Centre for Economic Performance (CEP)
Date Deposited: 11 Apr 2016 14:26
Last Modified: 20 Nov 2019 11:39
URI: http://eprints.lse.ac.uk/id/eprint/66027

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