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Convergence and Regional Productivity Divide in Italy: Evidence from Panel Data

  • Aiello, Francesco
  • Scoppa, Vincenzo

Abstract: Using a panel data model to control for differences in regional technological levels and to take into account endogeneity, we find two key results for the growth of Italian regions. Firstly, we show that the rate of conditional convergence of each region is much higher (from 12% to 18% according to specifications) than that estimated in standard cross-section regressions (2%). Secondly, a large part of productivity gaps across regions cannot be imputed to differences in physical or human capital but it is rather related to relevant differences in Total Factor Productivity (TFP).

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File URL: http://mpra.ub.uni-muenchen.de/17343/1/MPRA_paper_17343.pdf
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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 17343.

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Date of creation: Aug 2008
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Handle: RePEc:pra:mprapa:17343
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  9. Gaetano Carmeci & Luciano Mauro, 2002. "TheConvergence of the Italian Regions and Unemployment: Theory and Evidence," Journal of Regional Science, Wiley Blackwell, vol. 42(3), pages 509-532.
  10. Pesaran, M.H., 2004. "‘General Diagnostic Tests for Cross Section Dependence in Panels’," Cambridge Working Papers in Economics 0435, Faculty of Economics, University of Cambridge.
  11. Francesco Caselli & Gerardo Esquivel & Fernando Lefort, 1997. "Reopening the Convergence Debate: A New Look at Cross-Country Growth Empirics," Working Papers Central Bank of Chile 03, Central Bank of Chile.
  12. Marco Maffezzoli, 2004. "Convergence Across Italian Regions and the Role of Technological Catch-Up," Working Papers 274, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
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  16. M Arellano & O Bover, 1990. "Another Look at the Instrumental Variable Estimation of Error-Components Models," CEP Discussion Papers dp0007, Centre for Economic Performance, LSE.
  17. Peter J. Klenow & Mark Bils, 2000. "Does Schooling Cause Growth?," American Economic Review, American Economic Association, vol. 90(5), pages 1160-1183, December.
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  22. Miriam A. Golden & Lucio Picci, 2005. "Proposal For A New Measure Of Corruption, Illustrated With Italian Data," Economics and Politics, Wiley Blackwell, vol. 17, pages 37-75, 03.
  23. Francesco Aiello & Vincenzo Scoppa, 2000. "Uneven Regional Development in Italy: Explaining Differences in Productivity Levels," Giornale degli Economisti, GDE (Giornale degli Economisti e Annali di Economia), Bocconi University, vol. 59(2), pages 270-298, September.
  24. Canova, Fabio & Marcet, Albert, 1995. "The Poor Stay Poor: Non-Convergence Across Countries and Regions," CEPR Discussion Papers 1265, C.E.P.R. Discussion Papers.
  25. Loayza, Norman V. & DEC, 1994. "A test of the international convergence hypothesis using panel data," Policy Research Working Paper Series 1333, The World Bank.
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