Industrial districts, urban areas or both? The location behaviour of foreign and domestic firms in an Italian manufacturing region

The present paper aims at exploring the location behaviour of manufacturing firms, according to their ownership: domestic firms (henceforth DOMs) and inward foreign direct investments (henceforth IFDIs). This issue is empirically addressed by using data on manufacturing IFDIs and on DOMs in Veneto (north-east Italy) from the Reprint, AIDA and ISTAT databases. Veneto is an industrial district region, specialized in the Made-in-Italy sectors, hosting a central metropolitan area (Padua) and attracting a high share of IFDIs. Geo-referenced mapping and econometric analysis (counterfactual) are developed to explore the location behaviour of the two groups of firms. In line with previous work, findings show that IFDIs are more likely to be located in areas close to the main urban centres, such as the metropolitan area of Padua, to exploit the advantages of complex environments and higher connectivity. However, they also tend to locate in district areas more often than their DOMs counterfactual, suggesting the objective of acquiring a system of specialized productive knowledge and skills developed within a district ecosystem, and hardly reproducible in other contexts.