Concentration of Manufacturing and Service Sector Activities in Italy: Accounting for Spatial Dependence and Firm Size Distribution

Empirical analysis of the spatial distribution of economic activity on a discrete space is based on measures that suffer from a series of drawbacks. A methodological advance is proposed here in two respects. First, the analysis is extended to take spatial dependence explicitly into account. Second, differences in the size distribution of firms between territorial units are controlled for. Using data for Italy, exploratory spatial data analysis is applied to identify sectoral location patterns in both the manufacturing industry as well as the business services. It is found that large differences prevail in the geographical concentration of production across sectors. © 2013 Copyright Regional Studies Association.