Spatial agglomeration and business groups: new evidence from Italian industrial districts



this hypothesis we calculated a simple index of spatial concentration, defined as the ratio of
the overall employees of the group belonging to companies located in the same LLS. We
expect this ratio to be significantly higher in district groups than in non-district groups.

The degree of spatial concentration is very high for both types of groups. Also in this
case it is due to the large number of small groups, whose companies are mainly located
around the largest one. With the exception of the food groups the share of employees
within the same LLS is higher in district groups than in non-district group. Nevertheless
the difference between the mean values is statistically significant only for business groups
belonging to textile and clothing districts (Table 6).

___________Table 6 - Degree of spatial concentration of activities of business groups___________

District
________________________________
groups______

Non-district
_____
groups______

Test of diff.
of means

N. of

Spatial

N. of

Spatial

t

Sig.

groups

concent.

groups

concent.

(1 tail)

Food (17)

46

.87

685

.90

-1.51

.066

Textile and clothing (68)

477

.94

545

.91

2.88***

.002

Leather and footwear (28)

141

.94

178

.93

.71

.241

Furniture (39)

39

.96

82

.92

1.52*

.065

Mechanics (33)

826

.92

3329

.91

1.05

.148

Other sectors (14)_________

197

.92

2516

.92

.19

.424

*** significant at 1%, ** significant at 5%, * significant at 10%

Joint consideration of the results obtained comparing the specialization and spatial
concentration between district and non-district groups suggests the following conclusion.
The higher degree of information sharing within industrial districts, and the associated
easiness in seizing business opportunities, has more influence on the sectoral specialization
of firms than on the spatial location of their activities.

The result concerning the spatial concentration of activities could also be attributed to
limitations in the data we used to measure it. A first limitation in the data regards the fact
that employees in foreign companies are not considered. Previous studies, taking into
consideration the growth patterns of business groups demonstrated that when groups set
up new firms outside their original LLS it is more likely to be in foreign countries rather
than in other Italian LLS (BALLONI and IACOBUCCI, 2001). Some preliminary evidence
tends to suggest that the propensity for internationalization is lower for firms in industrial
districts than for firms outside industrial districts (MARIOTTI and MUTINELLI, 2004).

14



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