This article offers new evidence on agglomeration economies by examining the link between total factor productivity (TFP) and employment density in Italy. We investigate whether and how the TFP–density nexus contributes to explaining a relevant share of the marked productivity gap between the northern and the southern Italian regions. We estimate TFP for a large sample of manufacturing firms and then aggregate it at the level of local labour market areas. We tackle the endogeneity issues stemming from the presence of omitted covariates and reverse causation with an innovative set of diagnostic tests and an instrumental variable approach that relies on geological and historical data. Our estimate of the TFP elasticity to the spatial concentration of economic activities is about 0.045, a magnitude comparable to those measured for other developed countries. We also show that no significant heterogeneity emerges in the intensity of agglomeration economies across the country and that the positive TFP difference in favour of the firms located in the North is not due to the tougher competition taking place in those areas.

中文翻译：

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集聚和意大利南北分化


本文通过研究意大利全要素生产率 （TFP） 与就业密度之间的联系，提供了关于集聚经济的新证据。我们研究了 TFP-密度关系是否以及如何有助于解释意大利北部和南部地区之间显著的生产率差距的相关份额。我们估计了大量制造业企业样本的 TFP，然后在当地劳动力市场区域的层面上将其汇总。我们通过一套创新的诊断测试和依赖于地质和历史数据的工具变量方法来解决因存在遗漏的协变量和反向因果关系而引起的内生性问题。我们估计的 TFP 弹性对经济活动空间集中度的弹性约为 0.045，这一幅度与其他发达国家的测量幅度相当。我们还表明，全国各地集聚经济体的强度没有出现明显的异质性，而且有利于北部公司的正 TFP 差异并不是由于这些地区发生的竞争更加激烈。