FIRM PRODUCTIVITY AND INSTITUTIONAL QUALITY: EVIDENCE FROM ITALIAN INDUSTRY

Andrea Lasagni, Annamaria Nifo () and Gaetano Vecchione ()

Journal of Regional Science, 2015, vol. 55, issue 5, 774-800

Abstract: type="main">

This paper aims to contribute to the debate on the determinants of differentials in firms’ productivity. We test the hypothesis that macro factors, especially the quality of local institutions, play a central role in explaining firm productivity in Italy. To this end, we construct measures of Total Factor Productivity (TFP) for about 4,000 firms by means of different estimation techniques, and a province-level index of institutional quality. Then, we estimate the relationship between institutional quality and firm-level TFP. Our results show that the existence of better local institutions might help firms to become more productive.

Date: 2015
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Working Paper: Firm productivity and institutional quality. Evidence from Italian industry (2012)
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