Abstract

Are the observed spatial distributions of firms decided mostly by market-mediated, economy-wide locational forces, or rather by non-pecuniary, sector-specific ones? This work finds that the latter kind of forces weight systematically more than the former in deciding firm location. The analysis uses Italian data on manufacturing sectors spatially disaggregated at the level of Local Labor Market Areas. Other than the results for the whole of Italy in 1991 and 2001, the paper also provides results for the four macroregions that compose the country.