In this work we study the evolution of geographical differences in total factor productivity (TFP; a measure of the efficiency in combining different factors of production) estimated at firm level for corporations active in the manufacturing sector between 1995 and 2015. We also focus on the impact of the recent economic recession on these geographical differences.
In 2015 the average TFP in the South was 14 per cent lower than in the North-West (the gap widens if we do not account for workers' skill composition and for the actual level of work intensity); the differences were smaller in the Centre and in the North-East. Between 1995 and 2015 the North-South TFP divide modestly narrowed, in particular for the less productive firms, also as a consequence of their greater exit from the market during the economic recession.
Published in 2019 in: Politica economica/Journal of Economic Policy, v. 35, 2, pp. 209-242
