Journal Article

Civic capital and the size distribution of plants: short-run dynamics and long-run equilibrium

Matthias Bürker and G. Alfredo Minerva

in Journal of Economic Geography

Volume 14, issue 4, pages 797-847
Published in print July 2014 | ISSN: 1468-2702
Published online October 2013 | e-ISSN: 1468-2710 | DOI: http://dx.doi.org/10.1093/jeg/lbt032
Civic capital and the size distribution of plants: short-run dynamics and long-run equilibrium

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  • Firm Objectives, Organization, and Behaviour
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We characterize how the size distribution of plants, within narrowly defined industries, is related to the stock of civic capital at the provincial level. Data on plant size come from Italian censuses. Civic capital turns out to have a positive effect on both the average and standard deviation of size. Looking at several precise points of the plant size distribution, we find that it shifts toward the right and becomes more dispersed where civic capital is high. Furthermore, we explore to what extent the effect is heterogeneous across plants in relation to some specific characteristics. The potential endogeneity of current civic capital is addressed by instrumenting it with historical variables. We conclude that the geographic variation in the stock of civic capital poses substantial constraints on plants’ ability to expand. Understanding this is the key for the implementation of effective industrial policies.

Keywords: Civic capital; cooperation; opportunism; plant size distribution; A13; D23; L20; R12

Journal Article.  23558 words.  Illustrated.

Subjects: Firm Objectives, Organization, and Behaviour ; General Economics ; Urban, Rural, and Regional Economics ; Production and Organizations

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