Abstract
The present work aims at building a new indicator that measures how much a territory attracts new firms. Past research has exploited mainly spatial models or qualitative analyses performed through surveys. We aim to apply a new framework, namely a Dynamic Factor Model (DFM) in order to achieve a twofold goal: rank the ItalianNUTS 2 territories (regions) by their ability in attracting new firms and assessing which are the main factors that drive this phenomenon. The choice of such an empirical approach was selected also because we aim to proceed to such an assessment freeing our approach from any a priori theoretical imposition. Results highlight that key success factors for territorial competitiveness are the quality of the labour force and the efficiency of the infrastructures, while anchors to mediocrity are represented by high migration rates between young and skilled workers (brain drain dynamics) and stagnant labour markets.