Italian regional specialization: a spatial analysis

This paper tests for the presence and evaluates the effects of spatial interdependencies on Italian regional specialization over the period 1995-2006. We perform exploratory spatial data analysis (ESDA) and estimate a spatial panel data model built according to the NEG theory. ESDA reveals an overall positive spatial interdependence and detect “hot spots” in the North and “cold spots” in the South for all sectors, except for agriculture which shows the reverse. Spatial econometric estimation confirms these results, refuting diffusion of sectoral specialization at country level. The results in terms of specialization determinants are in line with the findings of NEG.