Capital quality and regional disparities: evidence from commercial vehicle transactions

Marta Crispino (), Michele Loberto () and Riccardo Russo ()
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Marta Crispino: Bank of Italy
Michele Loberto: Bank of Italy
Riccardo Russo: Bank of Italy

No 1548, Temi di discussione (Economic working papers) from Bank of Italy, Economic Research and International Relations Area

Abstract: We investigate regional heterogeneity in capital quality between Southern and Northern Italy using a new dataset covering all transactions of commercial motor vehicles by Italian firms. The regional distribution of motor-vehicle quality - measured by vehicle age and environmental efficiency - closely mirrors the geography of labour productivity. Observable firm attributes and physical vehicle characteristics together account for approximately one third of the cross-regional variation in the quality of the motor vehicle stock, leaving a substantial residual attributable to structural and market-level factors. Geographic market segmentation and lower inflows of newly registered vehicles contribute to the lower quality of Southern Italy's stock, although inflows of newer second-hand vehicles from the North partially mitigate this gap. Regional disparities in the quality of motor vehicles widened between 2015 and 2024.

Keywords: capital quality; regional disparities; firm productivity; capital reallocation (search for similar items in EconPapers)
JEL-codes: D24 E22 L62 R11 R12 (search for similar items in EconPapers)
Date: 2026-10
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