SPATIAL AGGLOMERATION, INNOVATION AND FIRM SURVIVAL FOR ITALIAN

Beyond the context of Salerno, the analysis of survival and innovation in the traditional SME sector is particularly important in Italy, where 95% of firms are the so-called Made-in-Italy firms1 and 94% have fewer than 10 employees.2 Hence, our findings provide important implications for industrial and regional policy aimed at enhancing innovativeness at the local level and contributing to improvi. [...] Variables Our key covariates (? ) for the firm survival models are: an innovator dummy (1/0); dummy variables for technological knowledge relevant to future innovation strategies accessible to the firms through proximity to the University of Salerno and technology parks; and the entrepreneur’s human capital as captured by the owner’s level of education, the owner’s age as a proxy for experience, a. [...] (2017), we define the direct effect as the average diagonal element of the full matrix expression on the right-hand side of equations [3-4], the indirect effect as the average row or column sums of the off-diagonal elements of the matrix expression, and the total effect as the sum of the two. [...] The central hypothesis is that the innovativeness and survival of the firms is driven by the diffusion of internal and external knowledge (which come from other firms in close geographical proximity and also the presence of nearby university research centers). [...] The principal finding is that a firm’s own innovativeness (internal to the firm) and the external innovativeness of neighboring firms positively affect the survival of firms, if these firms are in the immediate neighborhood.