Measurement of Agglomeration and Spatial Effects

The aim of the paper is to examine the influence of spatial agglomeration on the employment growth in the sicilian local labor systems. In this paper we want provide a methodological contribution to agglomeration literature. On the base of the hypothesis that the forces of agglomeration do not use up their effects inside of a single SLL but they extend to more wide geographic areas, and their effect fall down on the adjacent territorial partition; we have modified the traditional agglomeration index built by Maurell and Sédillot in 1999, at first, inverting the role of the industry with that one of the area, so we obtain a measure of agglomeration for each area, and then we included a spatial lag operator into the measure, to like neighborhood effects. We assessed these indices for all Sicilian LLSs and for twenty-one manufacturing and services sectors, at two digit level of Nace. We notice that the agglomeration index alter notably when spatial effects across areas are included in the measure; In particular, from the esploratory spatial data analysis of the traditional and new measures stand out the spatial dependence increases in the new measures substantially. On the align with the growth theories we consider many factors which potentially affect local employment dynamics like competition, industry structure, specialization, diversity, economy of scale, technological advantage but we focused on the role played by agglomeration interactions between contiguous areas on labour growth in the two inter census gap (1981-1991 and 1991-2001). There is a test for know if the spatial dependence included in the new agglomeration measure is relevant in the growth process of the areas, and more in detail we distinguish the different contribution of the traditional and new measure of agglomeration on the growth process of the territory