Output, investment and productivity: the Italian North–South regional divide from a Kaldor–Verdoorn approach

Matteo Deleidi, Walter Paternesi Meloni, Luigi Salvati and Francesca Tosi

Regional Studies, 2021, vol. 55, issue 8, 1376-1387

Abstract: This paper elaborates on the Italian North–South divide by endorsing a Kaldor–Verdoorn perspective. To assess the endogenous relationship between labour productivity, capital accumulation and output growth, panel structural vector autoregressive (P-SVAR) modelling is applied to 1980–2017 data on Italian macro-regions and areas. Findings show that territorial disparities exist in both the Verdoorn and the capital accumulation effects throughout the country. Output growth has a larger effect on productivity in the Centre–North, while the investment effect is stronger in the South. That stresses the relevance of public effort in stimulating both output and investment – therefore, productivity – especially in economically depressed areas.

Date: 2021
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DOI: 10.1080/00343404.2021.1896694

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