Spatial heterogeneity in factors misallocation: European evidence

Francesca Ghinami ()
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Francesca Ghinami: Gran Sasso Science Institute

No 2023-06, Discussion Paper series in Regional Science & Economic Geography from Gran Sasso Science Institute, Social Sciences

Abstract: This study investigates the spatial heterogeneity that factors misallocation reveals in nine EU-member countries (Germany, France, Austria, Italy, Spain, Portugal, Czech Republic, Slovenia and Poland) during the years 2011-2020. Misallocation, as in the degree of efficiency with which inputs are allocated across firms, is increasingly regarded as one main source of aggregate productivity differences across countries. Nevertheless, its within-country spatial and regional dimensions are still largely overlooked, notwithstanding numerous reasons for allocative efficiency to vary across different administrative units. This article aims at filling this gap by firstly performing an exploratory analysis of allocative efficiencies at different levels of territorial aggregation (NUTS0-3). Secondly, it provides evidence for the across-regions disparities in allocative efficiency to account for large shares of aggregate misallocation for all the examined European countries. Finally, it investigates and finds support for the hypothesis that variations in local institutional quality may help explaining regional differences in allocative efficiencies

Keywords: Total factor productivity; Misallocation; Regional disparities; Institutional Quality (search for similar items in EconPapers)
JEL-codes: D24 L25 O47 (search for similar items in EconPapers)
Pages: 49 pages
Date: 2023-12, Revised 2024-10
New Economics Papers: this item is included in nep-eec, nep-eff, nep-geo, nep-tra and nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:ahy:wpaper:wp43

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