A micro spatial analysis of firm demography: the case of food stores in the area of Trento (Italy)

The potential offered by the increasing availability of micro-geographic data is tremendous and still largely not exploited. In this paper we propose a new methodology to study the spatial dynamics of firm demography making use of such rich source of information. Exploiting the techniques of stochastic spatial point processes (Diggle, 2003) it is indeed possible to model the firm birth, growth and death explaining the behavior of the individual economic agent. We consider the spatial distribution of the economic activities as the result of a dynamic process occurring in space and time, and we model the micro-spatial patterns as single realizations of marked space-time survival point processes (Rathbun and Cressie, 1994). In such a methodological framework firms are created at some random location and some point of time and then operate, grow, and attract (or repulse) the localization of other firms in their neighborhood. The proposed model is fitted to some empirical data on firms’ locations sourced from the ASIA harmonised archive of the Italian National Institute of Statistics. The empirical analysis reveals the presence of local competition behaviour in firm creation among small retail food stores, thus shedding light on the phenomena of firm demography.