Local Policies for Innovation: The Case of Technology Districts in Italy

Abstract

In this paper we study a policy tool called technology districts, implemented in Italy over the last decade to foster local innovation activity. First, we examine the characteristics of technology districts and those of the firms within them. Next, we assess the performance of district firms. We find that in the Southern regions technology districts are more numerous but smaller than those located in the Centre-North, are poorly diversified from a sectorial point of view and more distant from the economic structure of the area. We find that the firms that did join a district had previously been, on average, larger, more innovative and profitable, and also show higher leverage than the others. Our results show that overall after the birth of a district the performance of the firms that joined it did not differ significantly from that of similar firms that did not.

Keywords: technology districts, innovation, patents, public policies, matching, differences-in-differences

JEL Classification: O31 R0 H2