Does Agglomeration Affect Exports? Evidence From Italian Local Labour Markets

This paper analyses whether and how agglomeration economies – related variety, specialisation and urbanisation – affect the export performance of Italian local labour markets (LLM). Adopting spatial econometric techniques, and controlling for potential non-linear effects, we find that related variety has a negligible effect on LLMs’ export intensity, while the effect of specialisation economies is negative. On the contrary, urbanisation economies positively affect export intensity. The robustness of these results is tested and confirmed using an alternative (institutional-based) spatial weights matrix.