Understanding the spatial structure of productivity: a hierarchical approach

Productivity is unevenly distributed across space, yet hierarchical approaches have rarely been used to study its spatial organization. This paper proposes a spatially explicit framework that applies the size–rank relationship to productivity and operationalises three complementary new indicators to answer: (i) whether the national productivity hierarchy is reproduced locally (vertical integration), (ii) how productivity is organized within local systems (core–periphery structure), and (iii) whether local dominance is associated with systematic productivity advantages. By applying this framework to the Italian Local Labour Systems, the paper reveals meaningful heterogeneity in local hierarchies of productivity, supporting the relevance of the proposed methodological approach for research and place-based policy interventions.