Convergence and Regional Productivity Divide in Italy: Evidence from Panel Data

Aiello, Francesco and Scoppa, Vincenzo (2008): Convergence and Regional Productivity Divide in Italy: Evidence from Panel Data.

Abstract

Abstract: Using a panel data model to control for differences in regional technological levels and to take into account endogeneity, we find two key results for the growth of Italian regions. Firstly, we show that the rate of conditional convergence of each region is much higher (from 12% to 18% according to specifications) than that estimated in standard cross-section regressions (2%). Secondly, a large part of productivity gaps across regions cannot be imputed to differences in physical or human capital but it is rather related to relevant differences in Total Factor Productivity (TFP).

• Item Type: MPRA Paper
• Language: English
• Keywords: economic growth, convergence, regional TFP heterogeneity; Italy
• Subjects: O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O11 - Macroeconomic Analyses of Economic Development; O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O47 - Empirical Studies of Economic Growth ; Aggregate Productivity ; Cross-Country Output Convergence; R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R1 - General Regional Economics > R11 - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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