Related Variety, Trade Linkages, and Regional Growth in Italy

Abstract

This article presents estimates of the impact of regional variety and trade linkages on regional economic growth by means of export and import data by Italian province (NUTS 3) and sector (three-digit) for the period 1995-2003. Our results show strong evidence that related variety contributes to regional economic growth. Thus, Italian regions that are well endowed with sectors that are complementary in terms of competences (i.e., that show related variety) perform better. The article also assesses the effects of the breadth and relatedness of international trade linkages on regional growth, since they may bring new and related variety to a region. Our analysis demonstrates that regional growth is not affected by simply being well connected to the outside world or having a high variety of knowledge flowing into the region. Rather, we found evidence of related extraregional knowledge sparking intersectoral learning across regions. When the cognitive proximity between the extraregional knowledge and the knowledge base of a region is neither too small nor too large, real learning opportunities are present, and the external knowledge contributes to growth in regional employment. Copyright (c) 2009 Clark University.

On firms’ product space evolution: the role of firm and local product relatedness

“…Actually, recent literature on firm heterogeneity shows that firm innovation patterns are closely related to heterogeneous efficiency levels, which are, in turn, closely related to the diversity of firms' export activities (Melitz and Burstein, forthcoming). Finally, firms active in international markets may be more likely to innovate, as trade can be regarded as the flow of extra-regional knowledge (Boschma and Iammarino, 2009). On the one hand, importers may access new, better quality and more suitable inputs (Krishnan and Ulrich, 2001;Goldberg et al, 2009;Colantone and Crino`, 2014).…”

“…The role of relatedness between firms and the local pool of knowledge in Sweden is also confirmed by who show the positive impact of intra-regional-related skill mobility on firms' productivity growth. Boschma and Iammarino (2009) also look at the role of 'related' knowledge on regional economic growth in Italian provinces for the period 1995-2003. Their relatedness indicator hinges on the belonging of sectors/products to the same twodigit sector, thus following the notion proposed by Frenken et al (2007).…”

“…A recent body of literature has highlighted the role of technological relatedness for starting a new sector in a country (Hausmann and Hidalgo, 2009;Hidalgo, 2009), a region (Boschma and Iammarino, 2009;Neffke et al, 2011;Boschma et al, 2012Boschma et al, , 2013 or a firm (Breschi et al, 2003;Poncet and de Waldemar, 2012;Neffke and Henning, 2013). In particular, empirical work in economic geography has shown that knowledge spillovers can spur innovation and growth across economic units located in space, as long as the right-not too little, not too much (Nooteboom, 2000;Boschma, 2005)-extent of cognitive proximity exists among the relevant economic actors.…”

High-growth firms and technological knowledge: do gazelles follow exploration or exploitation strategies?

“…Its earlier applications aimed at measuring the diversity degree of industrial activity (or of a sample of firms within an industry) against a uniform distribution of economic activities in all sectors, or among firms (Attaran, 1985;Frenken et al, 2007;Boschma and Iammarino, 2009). …”

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