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Supply and demand-side determinants of productivity growth in Italian regions

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  • Millemaci, Emanuele
  • Ofria, Ferdinando

Abstract

The objective of this paper is to identify the long run determinants of productivity growth for the manufacturing sector of the Italian regions. Demand and supply-side factors are considered: on the demand side, we refer to the estimation of the Verdoorn effect, while, on the supply side, we explore the role of R&D expenditures and transport infrastructure endowments. Our estimation methodology consists of both pooled cross-section OLS and time series LIML estimators using data collected by CRENoS and Istat covering the period 1964–2009. We find evidence of a statistically significant Verdoorn effect. Labor costs, R&D and railway infrastructure have a positive impact on productivity growth.

Suggested Citation

  • Millemaci, Emanuele & Ofria, Ferdinando, 2016. "Supply and demand-side determinants of productivity growth in Italian regions," Structural Change and Economic Dynamics, Elsevier, vol. 37(C), pages 138-146.
  • Handle: RePEc:eee:streco:v:37:y:2016:i:c:p:138-146
    DOI: 10.1016/j.strueco.2016.04.001
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    Keywords

    Kaldor–Verdoorn law; Increasing returns; Productivity; Manufacturing; Italian regions; R&D; Infrastructures;

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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