Intersectoral and spatial spill-overs of firms’ bankruptcy in Spain

This paper employs provincial data to study the spatial and intersectoral spill-overs
in aggregate failure rates in Spain, by using an Integrated Nested Laplace Approximation.
The analysis is based on NUTS3 data over the time span 2005Q1-2013Q4.
By speculating on the effects of the Spanish financial crisis, we document empirical
evidence of the presence of spatial spill-overs among neighboring counties. Furthermore,
some intersectoral spill-overs are also detected: we observe that Industry and
Agriculture exhibit a positive impact on the Service sector. These results can be useful
to design proper policy rules to better manage the spread of bankruptcies over
time and space.