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Be productive or face decline. On the sources and determinants of output growth in Italian manufacturing firms

  • Francesco Aiello

    ()

    (University of Calabria)

  • Camilla Mastromarco

    ()

    (University of Salento)

  • Angelo Zago

    ()

    (Department of Economics (University of Verona))

We investigate the sources and determinants of output growth of Italian manufacturing firms. Applying stochastic frontier techniques, we decompose output growth into factor accumulation and TFP growth from 1998 to 2003. TFP growth is further decomposed into technological change, efficiency change, and scale effects.We find that both input accumulation and TFP growth are important in explaining output growth. In addition, efficiency change (technological catch-up) is the most significant component of TFP growth. Finally, using a specific formulation of the asymmetric error component, we find that R&D spillovers, banking efficiency and public infrastructures have statistically significant and economically relevant effects on the technological catch-up.

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Paper provided by University of Verona, Department of Economics in its series Working Papers with number 46/2008.

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Date of creation: Mar 2008
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Handle: RePEc:ver:wpaper:46/2008
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