Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/307327 
Year of Publication: 
2024
Series/Report no.: 
CESifo Working Paper No. 11397
Publisher: 
CESifo GmbH, Munich
Abstract: 
This paper studies a place-based industrial policy (PBIP) aiming to establish industrial clusters in Italy in the 1960s-70s. Combining historical archives spanning one century with administrative data and leveraging exogenous variation in government intervention, we investigate both the immediate effects of PBIP and its long-term implications for local development. We document agglomeration of workers and firms in the targeted areas persisting well after the end of the policy. By promoting high-technology manufacturing, PBIP favored demand for business services and the emergence of a skilled local workforce. Over time, this produced a spillover from manufacturing – the only sector targeted by the program – to services, especially in knowledge-intensive jobs. Accordingly, we estimate higher local wages, human capital, and house prices in the long run. We provide suggestive evidence that these persistent effects may depend on the initial conditions of targeted locations.
Subjects: 
place-based industrial policy
employment
wages
agglomeration
JEL: 
J24
N94
O14
O25
R58
Document Type: 
Working Paper
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