Local agglomeration economies: what impact on multinational and national Italian firms’ survival?

Abstract

The aim of this paper is to analyze the determinants of firm survival devoting special interest to local agglomeration economies and to their different impact on multinational and national Italian manufacturing establishments. We use a large unbalanced micro-panel data set made of 884232 observations including both new and incumbent corporate firms. Data are disaggregated by firm, sector, and province and concern manufacturing firms localized in the 110 Italian provinces over 2002-2010. We employ semi-parametric Cox hazard models to explore the determinants of duration between a firm´s start-up and its cessation of economic activity focusing on the role of urbanization economies, local industrial clusters, industry specialization, intra and extra-industry variety, respectively for multinational and national firms.