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Explaining TFP at firm level in Italy. Does location matter?

  • Aiello, Francesco
  • Pupo, Valeria
  • Ricotta, Fernand

This study considers how firms’ internal variables and regional factors affect the total factor productivity of Italian manufacturing firms. Due to of the hierarchical structure of data in estimation, we employ a multilevel model. Results, which refer to 2006, show the importance of firm-specific determinants of TFP, but at the same time confirm the role of regional context in explaining the gap in TFP levels which exist between the South and the North of Italy. In this respect, we show that northern firms are localised in regions with adequate endowment of infrastructure, with efficient public administration and with high R&D intensity and, as a result of these factors, perform better than firms operating in less well endowed regions.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 35656.

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Date of creation: 30 Dec 2011
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Handle: RePEc:pra:mprapa:35656
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