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Turbulence underneath the big calm? Exploring the micro-evidence behind the flat trend of manufacturing productivity in Italy

Author

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  • Giovanni Dosi
  • Marco Grazzi
  • Chiara Tomasi
  • Alessandro Zeli

Abstract

Italy ranked last in terms of manufacturing productivity growth according to OECD estimates over the last decade with a flat, if not declining, trend. In this work we investigate the underlying firm-level dynamics of enterprises on the grounds of a database developed by the Italian Statistical Office (ISTAT) covering the period 1989-2004 and containing information on more than 100,000 firms. Over the period not only the indicators of central tendency of the distribution of labour productivities have not significantly changed, but also the whole sectoral distributions have remained relatively stable over time, with their support at least not shrinking or even possibly widening over time. This is even more surprising if one takes into consideration the 'Euro' shock that occurred during the period of investigation. On the contrary we observe that inter-decile differences in productivity have been increasing. Further, heterogeneous firms' characteristics (i.e. export activity and innovativeness) appear to have contributed to boost such intra-industry differences. Given such wide heterogeneities we resort to quantile regressions to identify the impact of a set of regressors at different levels of the conditional distribution of labor productivity. One phenomenon that we observe is what we call a tendency toward 'neo-dualism' involving the co-existence of a small group of dynamic firms with a bigger ensemble of much less technologically progressive ones.

Suggested Citation

  • Giovanni Dosi & Marco Grazzi & Chiara Tomasi & Alessandro Zeli, 2010. "Turbulence underneath the big calm? Exploring the micro-evidence behind the flat trend of manufacturing productivity in Italy," LEM Papers Series 2010/03, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
  • Handle: RePEc:ssa:lemwps:2010/03
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    References listed on IDEAS

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    1. Giulio Bottazzi & Giovanni Dosi & Nadia Jacoby & Angelo Secchi & Federico Tamagni, 2010. "Corporate performances and market selection: some comparative evidence," Industrial and Corporate Change, Oxford University Press, vol. 19(6), pages 1953-1996, December.
    2. Giulio Bottazzi & Marco Grazzi & Angelo Secchi & Federico Tamagni, 2011. "Financial and economic determinants of firm default," Journal of Evolutionary Economics, Springer, vol. 21(3), pages 373-406, August.
    3. Giovanni Dosi & Luigi Marengo & Corrado Pasquali, 2010. "How Much Should Society Fuel the Greed of Innovators? On the Relations between Appropriability, Opportunities and Rates of Innovation," Chapters,in: The Capitalization of Knowledge, chapter 4 Edward Elgar Publishing.
    4. Bottazzi, Giulio & Grazzi, Marco & Secchi, Angelo, 2005. "Input output scaling relations in Italian manufacturing firms," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 355(1), pages 95-102.
    5. Giovanni Dosi & Marco Grazzi, 2006. "Technologies as problem-solving procedures and technologies as input--output relations: some perspectives on the theory of production," Industrial and Corporate Change, Oxford University Press, vol. 15(1), pages 173-202, February.
    6. Mark Doms & Eric J. Bartelsman, 2000. "Understanding Productivity: Lessons from Longitudinal Microdata," Journal of Economic Literature, American Economic Association, vol. 38(3), pages 569-594, September.
    7. Francesco Serti & Chiara Tomasi, 2008. "Self-Selection and Post-Entry Effects of Exports: Evidence from Italian Manufacturing Firms," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 144(4), pages 660-694, December.
    8. Giulio Bottazzi & Elena Cefis & Giovanni Dosi & Angelo Secchi, 2003. "Invariances and Diversities in the Evolution of Manufacturing Industries," LEM Papers Series 2003/21, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    9. Teece, David J. & Rumelt, Richard & Dosi, Giovanni & Winter, Sidney, 1994. "Understanding corporate coherence : Theory and evidence," Journal of Economic Behavior & Organization, Elsevier, vol. 23(1), pages 1-30, January.
    10. Davide Castellani & Antonello Zanfei, 2007. "Internationalisation, Innovation and Productivity: How Do Firms Differ in Italy?," The World Economy, Wiley Blackwell, vol. 30(1), pages 156-176, January.
    11. Koenker, Roger W & Bassett, Gilbert, Jr, 1978. "Regression Quantiles," Econometrica, Econometric Society, vol. 46(1), pages 33-50, January.
    12. Marco Grazzi, 2009. "Trade and Profitability: Is there an export premium? Evidence from Italian manufacturing firms," LEM Papers Series 2009/16, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    13. Giulio Bottazzi & Angelo Secchi, 2006. "Maximum Likelihood Estimation of the Symmetric and Asymmetric Exponential Power Distribution," LEM Papers Series 2006/19, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    14. Giovanni Dosi & Marco Faillo & Luigi Marengo, 2003. "Organizational Capabilities, Patterns of Knowledge Accumulation and Governance Structures in Business Firms. An Introduction," LEM Papers Series 2003/11, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
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    Cited by:

    1. Fabio Pieri & Enrico Zaninotto, 2013. "Vertical integration and efficiency: an application to the Italian machine tool industry," Small Business Economics, Springer, vol. 40(2), pages 397-416, February.
    2. Cimoli, Mario & Martins, Antonio & Porcile, Gabriel & Sossdorf, Fernando, 2015. "Productivity, social expenditure and income distribution in Latin America," Desarrollo Productivo 201, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    3. Giovanni Dosi & Jiasu Lei & Xiaodan Yu, 2013. "Institutional Change and Productivity Growth in China's Manufacturing 1998-2007: the Microeconomics of Creative Restructuring," LEM Papers Series 2013/07, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.

    More about this item

    Keywords

    productivity; firm dynamics; market selection; trade; euro shock; quantile regressions;

    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • D20 - Microeconomics - - Production and Organizations - - - General
    • F10 - International Economics - - Trade - - - General
    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

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