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Institutional quality and firms’ productivity in European regions

Author

Listed:
  • Mariarosaria Agostino
  • Marco R. Di Tommaso
  • Annamaria Nifo
  • Lauretta Rubini
  • Francesco Trivieri

Abstract

The relationship between regional institutional quality and firms’ productivity in the period 2010–14 is investigated by regressing a measure of total factor productivity for European manufacturing small and medium-sized enterprises on a regional level index of institutional quality and its components, the rule of law and government effectiveness. Strong evidence is found that better local institutions help small and medium-sized enterprises become more productive. In addition, the impact of institutions interplays with some firm characteristics, such as firms’ size, age, human capital and productivity level, as well as firms’ operating sector. These findings have important implications for the definition of suitable strategies to foster economic growth in the European regions.

Suggested Citation

  • Mariarosaria Agostino & Marco R. Di Tommaso & Annamaria Nifo & Lauretta Rubini & Francesco Trivieri, 2020. "Institutional quality and firms’ productivity in European regions," Regional Studies, Taylor & Francis Journals, vol. 54(9), pages 1275-1288, September.
    • Handle: RePEc:taf:regstd:v:54:y:2020:i:9:p:1275-1288
    DOI: 10.1080/00343404.2020.1712689
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    Cited by:

    1. Razzaq, Asif & An, Hui & Delpachitra, Sarath, 2021. "Does technology gap increase FDI spillovers on productivity growth? Evidence from Chinese outward FDI in Belt and Road host countries," Technological Forecasting and Social Change, Elsevier, vol. 172(C).
    2. Adamu Jibir & Musa Abdu & Farida Bello & Iliya Garba, 2019. "Do Institutions Promote Firm Performance? Evidence from Sub-Saharan Africa," Review of Market Integration, India Development Foundation, vol. 11(3), pages 111-137, December.
    3. Julian Ramajo & Miguel A. Marquez & Geoffrey J. D. Hewings, 2021. "Addressing spatial dependence in technical efficiency estimation: A Spatial DEA frontier approach," Papers 2103.14063, arXiv.org.

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