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Exports, Supply Constraints and Growth: An Investigation using Regional Data

Author

Listed:
  • Salvatore D'Acunto
  • Sergio Destefanis
  • Marco Musella

Abstract

In this work we first model the role of demand- and supply-side factors (labour market adjustment, productive efficiency) in explaining economic growth. Empirically testing the model, we evaluate why different growth regimes may appear in the 20 Italian administrative regions. This exercise uses a two-stage econometric approach. Estimates for the elasticity of manufacturing output to exports are obtained from regional time series: a significant long-run relationship indicates the existence of a demand-constrained growth regime. We then ascertain whether the regional dispersion of supply-side factors has an impact on the regional dispersion of growth regimes. The empirical evidence supports our expectations of strong regional differences. Southern regions are less likely to display demand-constrained regimes. In explanation of these differences, second-stage analysis reveals that a strong role is played by such efficiency-enhancing factors as technological innovation, bank diffusion and 'social capital'. No role is found for labour market rigidities.

Suggested Citation

  • Salvatore D'Acunto & Sergio Destefanis & Marco Musella, 2004. "Exports, Supply Constraints and Growth: An Investigation using Regional Data," International Review of Applied Economics, Taylor & Francis Journals, vol. 18(2), pages 167-189.
  • Handle: RePEc:taf:irapec:v:18:y:2004:i:2:p:167-189
    DOI: 10.1080/0269217042000186660
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    References listed on IDEAS

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    Cited by:

    1. Manuela Deidda, 2016. "Insularity and economic development: a survey," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 63(2), pages 107-128, June.
    2. Vincenzo Patrizii & Giuliano Resce, 2015. "Public Sector Contribution To Competitiveness," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 1(3), pages 401-443, November.
    3. Emanuele Millemaci & Ferdinando Ofria, 2014. "Kaldor-Verdoorn's law and increasing returns to scale: A comparison across developed countries," Journal of Economic Studies, Emerald Group Publishing, vol. 41(1), pages 140-162, January.
    4. F. Pastore, 2015. "The Mezzogiorno and Crisis after Market and State Failures. A Review of Economic Literature," Rivista economica del Mezzogiorno, Società editrice il Mulino, issue 3-4, pages 525-582.
    5. Destefanis, Sergio, 2012. "Alcune considerazioni sul mercato del lavoro italiano alla luce della ricostruzione delle serie storiche territoriali per il mercato del lavoro, 1861-2011
      [Some Considerations on the Italian Labour
      ," MPRA Paper 59611, University Library of Munich, Germany.
    6. Destefanis, Sergio & Storti, Giuseppe, 2005. "Evaluating Business Incentives Through DEA. An Analysis on Capitalia Firm Data," MPRA Paper 62336, University Library of Munich, Germany.
    7. Giannola, Adriano & Petraglia, Carmelo & Scalera, Domenico, 2016. "Net fiscal flows and interregional redistribution in Italy: A long-run perspective (1951–2010)," Structural Change and Economic Dynamics, Elsevier, vol. 39(C), pages 1-16.
    8. Ferdinando Ofria, 2009. "L'approccio Kaldor-Verdoorn: una verifica empirica per il Centro-Nord e il Mezzogiorno d'Italia (anni 1951-2006)," Rivista di Politica Economica, SIPI Spa, issue 1, pages 179-207, January-M.
    9. Yenteshwar Ram, Biman Prasad, Ron Duncan, 2005. "Explaining the Supply-side Constraints to Export-led Growth in Selected Pacific Island Countries," Working Papers 205, Asia-Pacific Research and Training Network on Trade (ARTNeT), an initiative of UNESCAP and IDRC, Canada..
    10. Sergio Destefanis & Giuseppe Mastromatteo, 2009. "Labor-market Performance in the OECD--An Assessment of Recent Evidence," Economics Working Paper Archive wp_559, Levy Economics Institute.
    11. Elias Soukiazis & Pedro André Cerqueira & Micaela Antunes, 2015. "Causes of the decline of economic growth in Italy with special reference to the post-euro period: a balance-of-payments approach," Review of Keynesian Economics, Edward Elgar Publishing, vol. 3(4), pages 491—516-4, October.
    12. Sergio Destefanis & Vania Sena, 2009. "Public capital, productivity and trade balances: some evidence for the Italian regions," Empirical Economics, Springer, vol. 37(3), pages 533-554, December.

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