Going abroad on regional shoulders: the role of spillovers on the composition of regional exports

In this paper we examine the existence of destination, industry, and generic export spillovers at the regional level. The empirical analysis is conducted by examining data on export activity of one hundred three Italian NUTS 3 regions, the ten industries with the highest export values in the period 2004-2008, and the fifteen main countries of destination of Italy’s exports. In particular we analyse the decision of export and subsequent flow of trade and we aim to identify the source and quantify the effect of spillovers generated at the regional level by means of a selection-bias corrected panel data model. In order to control for the different territorial effects, three models are estimated. The first one uses all the observations in the period, the second one is estimated using only the regions located in the north-centre of Italy, and the last one is estimated considering the data from the south of Italy. With the inclusion of controls, results show a distinct effect of export industry, destination, and generic spillovers both on the intensive and extensive margins of trade. Spillovers at the start of export activity are stronger when specific by product while are stronger generically when analysing the export flow.