Business change in Italian regions. A spatial shift-share approach to plant-level data

In this paper, a shift-share decomposition analysis of business change at plant-level is applied to Italian regions with reference to the period 2004-2009. In particular, a spatial version of shift-share analysis allows to look not only at the national, industrial mix and regional-shift components, as in traditional approaches, but also at the neighbourhood effect. Additionally, we introduce a novel spatial decomposition which is able to conclude more effectively on the neighbourhood influence. Moreover, the micro-level nature of data allows us to analyse the neighbourhood effect at different spatial levels of aggregation (NUTS-2 and NUTS-3 regions). Some results are worth mentioning. First, the spatial level of aggregation affects heavily the results. Second, we find evidence of neighbourhood advantage in the Southern NUTS-3 regions and opposite results for the Central-Northern NUTS-3 regions. Third, we find evidence of positive industrial mix effects only in the Centre-North of Italy. Finally, results obtained over a shorter time span 2004-2007 confirm our conclusions