Spatial spillovers and spatial heterogeneity in local government efficiency: an application to a sample of Italian municipalities

Author/s Carlo Andrea Bollino, Gianfranco Di Vaio, Paolo Polinori
Publishing Year 2012 Issue 2012/3 Language Italian
Pages 25 P. 13-37 File size 905 KB
DOI 10.3280/REST2012-003002
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The aim of this work is to identify the existence of spatial spillover and spatial heterogeneity in local government efficiency, by using data from a newly constructed database about 341 municipalities from the Italian region Emilia- Romagna. Methods and Results The methodology is based on a two-step procedure. In the first step, cost efficiency scores are estimated by means of non-parametric Data Envelopment Analysis (DEA). In the second step, an Exploratory Spatial Data Analysis (ESDA), which is based on Moran’s I statistic, is applied to the efficiency scores computed in the previous step. Results show that municipalities are cost inefficient, on average, and that positive spatial externalities, in the form of positive spatial autocorrelation, influence the efficiency performance of local government. In particular, municipalities with a high degree of cost efficiency are surrounded by municipalities with a similar level of efficiency and vice versa. At the same time, results also show the existence of relevant spatial heterogeneity. Particular attention has been paid to the heterogeneity coming from outlying observations. Conclusions In this work we show the existence of spatial externalities in local government efficiency across municipalities from the Italian region Emilia-Romagna. Spatial spillovers provide evidence favoring theories of yardstick competition or phenomena like monitoring, benchmarking and knowledge transfer across space. At the same time, the presence of relevant spatial heterogeneity should be further investigated.

Keywords: DEA (Data Envelopment Analysis), ESDA (Exploratory Spatial Data Analysis), efficienza governi locali, osservazioni anomale

Jel codes: C21, C61, R38.

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Carlo Andrea Bollino, Gianfranco Di Vaio, Paolo Polinori, Spillovers ed eterogeneità spaziale nell’analisi dell’efficienza economica a livello comunale: un’applicazione per i comuni dell’Emilia Romagna in "RIVISTA DI ECONOMIA E STATISTICA DEL TERRITORIO" 3/2012, pp 13-37, DOI: 10.3280/REST2012-003002