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The purpose of this study is to analyse the spatial pattern and the post-entry performance of tourism businesses in the Italian insular regions of Sardinia and Sicily. Using geo-referenced micro-data for the period 2011-2014, we explore the spatial distribution of ac-commodation firms in the two insular regions, and then compare the coastal and inland areas of the two regions. We observe a higher dispersion of firms in Sardinia than in Sicily; the latter, however having a higher concentration of firms in coastal and urban areas. We do not find significant differences in survival probability across the two insular regions but we do detect significant differences be-tween coastal and inland areas in Sicily.

The study explores the geographical pattern of the accommodation industry in the Italian insular region of Sicily, focusing on the determinants of the risk of market exit. We adopt a standard framework of business survival analysis where agglomeration economies play an important role. We then extend the analysis by considering the role of geography to explore whether the risk of market exit depends on nearness to desirable amenities. The geography is here measured by the distance from the coast and the altitude of the place where the firm is located. When we look at the entire population of accommodation firms that started between 2010 and 2014, we find evidence that the risk of failure increases for those which are over 2 km from the coast.

Rural areas still suffer from a lack of sustainable development, and the diversification of farms may be a step in the right direction. The paper provides a detailed picture of the diversification of Sicilian farms into tourism services. Specifically, we propose a simple indicator of localization intensity of agritourism farms and explore their spatial distribution at municipality level. Our study highlights that Sicilian farms rarely diversify into tourism services, despite being situated in attractive areas. That said, some significant spatial clusters of municipalities where agritourism farms are highly concentrated do emerge from the study.