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Economic complexity and productivity polarization: Evidence from Italian provinces

Author

Listed:
  • Basile Roberto

    (Department of Industrial and Information Engineering and Economics, 90345 University of L’Aquila, L’Aquila, Italy)

  • Cicerone Gloria

    (476635 Gran Sasso Science Institute (GSSI) of L’Aquila, L’Aquila, Italy)

Abstract

In this paper, we analyze the role of economic complexity as a driver of regional labor productivity growth in Italy. The Economic Complexity Index (ECI) measures the multiplicity of knowledge embedded in an economy’s productive structure and can be interpreted as an indicator of “qualified diversity”. We assess the impact of ECI on the distribution dynamics of labor productivity by combining growth regression analysis with conditional density estimates. Counterfactual analysis results suggest that ECI plays a key role in the observed tendency to polarization of regional labor productivity. We also provide evidence of a long-run relationship between labor productivity and ECI by using a panel cointegration analysis.

Suggested Citation

  • Basile Roberto & Cicerone Gloria, 2022. "Economic complexity and productivity polarization: Evidence from Italian provinces," German Economic Review, De Gruyter, vol. 23(4), pages 567-594, December.
    • Handle: RePEc:bpj:germec:v:23:y:2022:i:4:p:567-594:n:2
    DOI: 10.1515/ger-2021-0070
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    More about this item

    Keywords

    Regional labor productivity; Economic complexity; Distribution dynamics;
    All these keywords.

    JEL classification:

    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • 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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