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Output, investment and productivity: the Italian North–South regional divide from a Kaldor–Verdoorn approach

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  • Matteo Deleidi
  • Walter Paternesi Meloni
  • Luigi Salvati
  • Francesca Tosi

Abstract

This paper elaborates on the Italian North–South divide by endorsing a Kaldor–Verdoorn perspective. To assess the endogenous relationship between labour productivity, capital accumulation and output growth, panel structural vector autoregressive (P-SVAR) modelling is applied to 1980–2017 data on Italian macro-regions and areas. Findings show that territorial disparities exist in both the Verdoorn and the capital accumulation effects throughout the country. Output growth has a larger effect on productivity in the Centre–North, while the investment effect is stronger in the South. That stresses the relevance of public effort in stimulating both output and investment – therefore, productivity – especially in economically depressed areas.

Suggested Citation

  • Matteo Deleidi & Walter Paternesi Meloni & Luigi Salvati & Francesca Tosi, 2021. "Output, investment and productivity: the Italian North–South regional divide from a Kaldor–Verdoorn approach," Regional Studies, Taylor & Francis Journals, vol. 55(8), pages 1376-1387, August.
    • Handle: RePEc:taf:regstd:v:55:y:2021:i:8:p:1376-1387
    DOI: 10.1080/00343404.2021.1896694
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