A structural analysis of productivity in Italy: a cross-industry, cross-country perspective

Rosalia Greco ()
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Rosalia Greco: Bank of Italy

No 825, Questioni di Economia e Finanza (Occasional Papers) from Bank of Italy, Economic Research and International Relations Area

Abstract: Since 2000, Italy's output growth lagged behind countries like Germany, France, and Spain, primarily due to weak labor productivity dynamics. Italy's labor productivity growth, especially low before the Great Recession, showed a small improvement afterwards, driven by the business sector. Productivity growth and levels vary across sectors, with the industrial sector generally outperforming market services in all countries. Italy's low aggregate growth, however, cannot be traced back to a composition tilted towards low productivity sectors, rather to across-the-board insufficient sectors' productivity growth. Few exceptions emerge in the industrial sector in 2014-2019: some manufacturing sectors that are more exposed to international trade exhibited higher productivity growth in Italy than elsewhere. Investment affects labor productivity growth through capital deepening. Investment trends, influenced by the financial crisis, varied across countries and sectors. Investment in intangibles (especially important for innovation) consistently increased, while investment in other assets fluctuated, with Italy and Spain experiencing delayed recovery. Intangibles constituted a larger share of investment in the industrial sector, and were most relevant in France.

Keywords: labor productivity; growth; investment (search for similar items in EconPapers)
JEL-codes: E22 E24 O47 O52 (search for similar items in EconPapers)
Date: 2023-12
New Economics Papers: this item is included in nep-eec, nep-eff, nep-eur and nep-sbm
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