Papers in Evolutionary Economic Geography

February 12, 2012

# 12.03 Regional variety and employment growth in Italian labour market areas: services versus manufacturing industries

Filed under: 2012 — Tags: , , , , — mattehartog @ 6:00 pm

Francesca Mameli, Simona Iammarino, Ron Boschma

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This paper investigates the impact of regional sectoral diversity on regional employment growth in Italy over the period 1991-2001. Assuming that externalities may be stronger between industries selling similar products or sharing the same skills and technology (i.e. related industries), we analyze the role of different forms of sectoral variety at the Local Labour System (LLS) level. Our results show strong evidence of a general beneficial effect of a diversified sectoral structure but suggest also the need to differentiate the analysis between manufacturing and services. In particular, overall local employment growth seems to be favoured by the presence of a higher variety of related service industries, while no role is played by related variety in manufacturing. When looking at diversity externalities between macro-aggregates, the service industry is affected by related variety in manufacturing, while no evidence of externalities is found from tertiary sectors to manufacturing.

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