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The Quality of Regional Government and Firm Performance

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  • Fernanda Ricotta

Abstract

This paper examines the effect of the quality of regional government (QoG) on firm Total Factor Productivity (TFP) in a multi-country context. The analysis is based on comparable cross-country data of manufacturing firms operating in seven European countries. To disentangle internal from external productivity drivers, the multilevel approach is employed. Results show that firms’ characteristics are important but external factors also play a role. As regards the specific scope of this paper, the results provide evidence that institutional differences within countries do matter for firm performance. The attempts made to address endogeneity problems confirm the positive and significant impact of the quality of regional institutions on firm performance.

Suggested Citation

  • Fernanda Ricotta, 2019. "The Quality of Regional Government and Firm Performance," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 11(2), pages 27-40, February.
    • Handle: RePEc:ibn:ijefaa:v:11:y:2019:i:2:p:27-40
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    1. Roberto Ganau & Andrés Rodríguez‐Pose, 2019. "Do high‐quality local institutions shape labour productivity in Western European manufacturing firms?," Papers in Regional Science, Wiley Blackwell, vol. 98(4), pages 1633-1666, August.

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    Keywords

    institutions; firm performance; European regions; multilevel model;
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    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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