Firm heterogeneity in TFP, sectoral innovation and geography. Evidence from Italy
AbstractSectoral and territorial specificities affect the firm’s capabilities of being productive. While there is a wide consensus on this, a quantitative measure of the these effects has been lacking. To this end, we combine a dataset of Italian firms with some meso regional and sectoral variables and apply a cross-classified model that allows for a clear distinction between firm, region-specific and sector-specific effects. After observing a marked TFP heterogeneity across firms, the paper addresses the issue of understanding how much differences in firms’ productivity depend on regional localisation and sector specificities. Results refer to 2004-2006 and are threefold. Firstly, they confirm that the main source of firm variety is mostly due to differences revealed at individual level. Secondly, we find that sector is more important than location in explaining firms’ TFP. Lastly, the results show that firm TFP increases when it belongs to more innovative sectors. Similarly, companies get benefits from belonging to sectors where there is a high proportion of firms using R&D public support and a high propensity to collaborate in innovative projects.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 48573.
Date of creation: 23 Jul 2013
Date of revision:
Total Factor Productivity; Firms’ Heterogeneity; Sectoral innovation; Geography; Cross-Classified Models;
Find related papers by JEL classification:
- L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
- L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
- O33 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-07-28 (All new papers)
- NEP-BEC-2013-07-28 (Business Economics)
- NEP-CSE-2013-07-28 (Economics of Strategic Management)
- NEP-EFF-2013-07-28 (Efficiency & Productivity)
- NEP-GEO-2013-07-28 (Economic Geography)
- NEP-INO-2013-07-28 (Innovation)
- NEP-KNM-2013-07-28 (Knowledge Management & Knowledge Economy)
- NEP-SBM-2013-07-28 (Small Business Management)
- NEP-TID-2013-07-28 (Technology & Industrial Dynamics)
- NEP-URE-2013-07-28 (Urban & Real Estate Economics)
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