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Capital quality and regional disparities: evidence from commercial vehicle transactions

Author

Listed:
  • Marta Crispino

    (Bank of Italy)

  • Michele Loberto

    (Bank of Italy)

  • Riccardo Russo

    (Bank of Italy)

Abstract

We investigate regional heterogeneity in capital quality between Southern and Northern Italy using a new dataset covering all transactions of commercial motor vehicles by Italian firms. The regional distribution of motor-vehicle quality - measured by vehicle age and environmental efficiency - closely mirrors the geography of labour productivity. Observable firm attributes and physical vehicle characteristics together account for approximately one third of the cross-regional variation in the quality of the motor vehicle stock, leaving a substantial residual attributable to structural and market-level factors. Geographic market segmentation and lower inflows of newly registered vehicles contribute to the lower quality of Southern Italy's stock, although inflows of newer second-hand vehicles from the North partially mitigate this gap. Regional disparities in the quality of motor vehicles widened between 2015 and 2024.

Suggested Citation

  • Marta Crispino & Michele Loberto & Riccardo Russo, 2026. "Capital quality and regional disparities: evidence from commercial vehicle transactions," Temi di discussione (Economic working papers) 1548, Bank of Italy, Economic Research and International Relations Area.
    • Handle: RePEc:bdi:wptemi:td_1548_26
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    File URL: https://www.bancaditalia.it/pubblicazioni/temi-discussione/2026/2026-1548/en_tema_1548.pdf
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    Keywords

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    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • 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)
    • L62 - Industrial Organization - - Industry Studies: Manufacturing - - - Automobiles; Other Transportation Equipment; Related Parts and Equipment

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