No. 676 - Structural change and firm dynamics in the south of Italy

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by Francesco Bripi, Raffaello Bronzini, Elena Gentili, Andrea Linarello and Elisa ScarinziMarch 2022

This paper examines structural change in sectoral employment shares in the last two decades in the Centre-North and in the South of Italy. In the first part, we analyse the dynamics of employment by industry and the role of structural change on productivity. In the second part, we examine the effect of firms' entry and exit on employment in each area of the country.

The process of deindustrialization in the South of Italy started later than in the rest of the country, it was stronger and led mainly by less knowledge-intensive services. The recomposition of employment shares in favour of services has slowed down productivity growth in the Centre-North; in the South productivity declined across all sectors. In the Centre-North, incumbent firms and larger ones led employment growth; in the South it was led by the entry of new firms.

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