Technological districts localized spillovers and productivity growth. The Italian evidence on technological externalities in the core regions

Technological R&D externalities are the effects on the technological capacity of each firm stemming from the complementary and interrelated activities of R&D activities of other firms that operate both in the same industry and in other industries. R&D technological externalities are specially influential at the regional level. Regional proximity enhances the circulation of information, the opportunities for external learning; the scope for capitalizing on potential complementarities among the variety of firms and the different R&D activities being carried out by each firm, and the opportunity for technological networking. The empirical evidence on core regions in Italy in the 1980s confirms that regional clustering of complementary and interrelated R&D activities facilitated the emergence of technological districts. Firms located within technological districts benefited enormously from the R&D technological externalities spilling out from the complementary and interrelated R&D activities of other firms localized in the same area. Consequently, firms localized within technological districts had fast rates of introduction of technological innovations which, in turn, made it possible for total factor productivity levels to be raised with comparatively low levels of intra-muros R&D expenses.