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

Angelo Zago, Francesco Aiello () and Camilla Mastromarco ()

No 46, Working Papers from Università di Verona, Dipartimento di Scienze economiche

Abstract: This paper investigates 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.

Keywords: growth accounting; stochastic frontiers; TFP; R&D spillovers; banking efficiency; infrastructure; Italian manufacturing firms. (search for similar items in EconPapers)
JEL-codes: O47 C23 G21 H54 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-eff
Date: 2008-03
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