FIRM PRODUCTIVITY AND INSTITUTIONAL QUALITY: EVIDENCE FROM ITALIAN INDUSTRY |
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| Authors: | Andrea Lasagni Annamaria Nifo Gaetano Vecchione |
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| Institution: | 1. Department of Economics, University of Parma, Sezione di Economia Agroalimentare, Parma, Italy;2. Department of Economics and Law, University of Sannio, Benevento, Italy;3. Department of Political Science, Second University of Naples, Viale Ellittico, Caserta, Italy |
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| Abstract: | 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. |
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