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TFP differentials across Italian macro-regions: an analysis of manufacturing corporations between 1995 and 2015

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  • Emanuele Ciani

    (Bank of Italy)

  • Andrea Locatelli

    (Bank of Italy)

  • Marcello Pagnini

    (Bank of Italy)

Abstract

In this work we study the geographical differences in total factor productivity (TFP) estimated at firm level for corporations active in the manufacturing sector between 1995 and 2015. In 2015 the average TFP in the South was between 14 and 33 per cent lower than in the North-West: the largest estimate is obtained using the number of employees as a proxy for labor input; the smallest, by using the cost of labor which better captures the skill composition and the actual work intensity. Productivity levels in the North-East were close to those in the other Northern regions; firms in the Centre were in-between. During the two decades the TFP gap between more productive and less productive firms contracted in all areas, but more so in the South; this led to a modest reduction in the North-South TFP divide, which was also driven by a more intense selection process in the Southern regions during the economic recession.

Suggested Citation

  • Emanuele Ciani & Andrea Locatelli & Marcello Pagnini, 2018. "TFP differentials across Italian macro-regions: an analysis of manufacturing corporations between 1995 and 2015," Questioni di Economia e Finanza (Occasional Papers) 438, Bank of Italy, Economic Research and International Relations Area.
    • Handle: RePEc:bdi:opques:qef_438_18
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    Cited by:

    1. Luigi Buzzacchi & Antonio De Marco & Marcello Pagnini, 2024. "Agglomeration and the Italian North–South divide," Journal of Economic Geography, Oxford University Press, vol. 24(5), pages 707-728.
    2. Cavallari, Lilia & Romano, Simone & Naticchioni, Paolo, 2021. "The original sin: Firms’ dynamics and the life-cycle consequences of economic conditions at birth," European Economic Review, Elsevier, vol. 138(C).
    3. Giuseppe Albanese & Guido de Blasio & Andrea Locatelli, 2021. "Does EU regional policy promote local TFP growth? Evidence from the Italian Mezzogiorno," Papers in Regional Science, Wiley Blackwell, vol. 100(2), pages 327-348, April.
    4. Giuseppe Albanese & Guido de Blasio & Andrea Locatelli, 2019. "Place-based Policy and Local TFP," Temi di discussione (Economic working papers) 1253, Bank of Italy, Economic Research and International Relations Area.

    More about this item

    Keywords

    total factor productivity; geographical differences;

    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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