Giacinto Micucci

Dynamic Macroeconomic Effects of Public Capital: Evidence from Regional Italian Data

This paper assesses the effects of public capital in Italy on the main macroeconomic aggregates: GDP, private capital and labour. A cointegrated vector autoregressive (VAR) model, in line with recent advancements in the field, allows us to take into account the complex nexus of direct and indirect links between the variables. We find a persistent increase in GDP in response to a positive shock to public capital; this result is mainly attributable to a strong stimulus exerted by public infrastructures on private capital (crowding in). The positive effects of public capital are quite pervasive across Italy, albeit to differing extents. In particular, a higher elasticity of GDP to public capital is estimated for the South, whereas marginal productivity turns out to be higher in the Centre-North. This suggests that public capital has a lower economic return in the South, bearing out the existence of a potential conflict between equity and efficiency goals. Finally, we indirectly document the existence of positive spillover effects at the regional level, allowing individual regions to benefit from the endowment of public capital in the rest of the country.

Mapping Local Productivity Advantages in Italy: Industrial Districts, Cities or Both?

Using data from a large sample of Italian manufacturing firms we provide novel empirical evidence on the magnitude of local productivity advantages in two types of spatially concentrated regions: urban areas (UAs) and industrial districts (IDs). A larger surplus is estimated for cities compared to industrial clusters, only partially related to the more skilled workforce employed in UAs. Over the last decade, the productivity premium of UAs has remained essentially unchanged, while that of IDs has showed a tendency to decline, suggesting that the former were better able to cope with the major shocks that hit the world economy.

Network effects of public transport infrastructure: Evidence on Italian regions*

This paper contributes to the empirical literature on the magnitude of the network effects of public infrastructures, introducing a novel approach. After estimating the dynamics common to time series for the regional public capital stock, coordinated policy shocks are identified within a properly specified structural VEC model. The findings confirm previous evidence that transport infrastructures exert positive macroeconomic effects in the long run. At the same time, it is shown that this effect is attributable mostly to the impact of coordinated public policy shocks, as the literature on network externalities predicts.

Il miglioramento qualitativo delle produzioni italiane: evidenze da prezzi e strategie delle imprese

Even before the global crisis, the Italian economy was experiencing international difficulties, although the slow growth and declining share of world trade were accompanied by a perceptible process of manufacturing transformation. The paper uses data from the Bank of Italy’s survey of manufacturers to measure a crucial aspect of the transformation, namely quality upgrading, from 2000 to 2006. The gauge of upgrading, not used in earlier literature, is the portion of price changes representing the return to value creation, both tangible (new products and the improvement of existing products) and intangible (branding policies). We find evidence that upgrading is responsible for a quarter of the firms’ average annual price increases (about zero point five out of two percentage points), with roughly equal effects from the tangible and the intangible components. The analysis also shows that product upgrade strategies help to foster job creation and sales growth.

GEOGRAPHY, PRODUCTIVITY AND TRADE: DOES SELECTION EXPLAIN WHY SOME LOCATIONS ARE MORE PRODUCTIVE THAN OTHERS?

Two main hypotheses are usually put forward to explain the productivity advantages of larger cities: agglomeration economies and firm selection. Combes et al. (2012) propose an empirical approach to disentangle these two effects and fail to find any impact of selection on local productivity differences. We theoretically show that selection effects do emerge when asymmetric trade and entry costs and different spatial scale at which agglomeration and selection may work are properly taken into account. The empirical findings confirm that agglomeration effects play a major role. However, they also show a substantial increase in the importance of the selection effect when asymmetric trade costs and a different spatial scale are taken into account.

L'impatto macroeconomico delle infrastrutture: una rassegna della letteratura e un'analisi empirica per l'Italia

L’impatto macroeconomico delle infrastrutture: una rassegna della letteratura e un’analisi empirica per l’Italia Il lavoro analizza l’impatto macroeconomico delle infrastrutture, attraverso una rassegna della letteratura, una meta-analisi e una stima su dati italiani. Esso mostra come in letteratura vi sia un generale consenso sugli effetti positivi delle infrastrutture, anche se i risultati sono assai sensibili alle tecniche di stima adottate. L’esercizio empirico sui dati italiani documenta che il capitale pubblico ha effettivamente avuto effetti positivi di lungo periodo sulla crescita, anche favorendo gli investimenti privati. I risultati non giustificano pero un generico invito ad accrescere la spesa. L’impatto della spesa sulla crescita dipende, infatti, soprattutto dal grado di efficienza che caratterizza il processo di spesa e realizzazione delle infrastrutture.

Hedonic Value of Italian Tourism Supply: Comparing Environmental and Cultural Attractiveness

This paper provides an empirical evaluation of the main determinants of hotel prices in the Italian tourism industry. We pool information from two datasets: i) a database on hotel prices and attributes based on the Touring Club Italia Guide and providing information on about 1,100 hotels located in almost 300 towns in the entire Italian coastal region; and ii) a set of neighbourhood characteristics indicators that assess local environmental quality and artistic and cultural attractiveness. On the basis of the results of a hedonic analysis of hotel price differentials, we show that tourists place a high value on both marine environmental quality and local access to artistic and cultural amenities. The contribution to consumer utility is sizeable in both cases, but that of artistic and cultural amenities appears to be more stable across seasons. On the whole, our results suggest that the widespread availability of an extraordinarily rich artistic and cultural endowment, as is the case of Italy, may strongly complement environmental attributes in supporting the non-price competitiveness of the coastal tourism industry.

The productivity advantages of spatial concentration: evidence from Italian Industrial districts and cities

The paper provides new, more detailed evidence on the productivity of manufacturing firms across Italian local labour markets by analysing a large firm-level database covering the 1995-2006 period. The analysis identifies two types of highly agglomerated areas - large cities and industrial districts - as opposed to smaller, non-specialized local markets, and shows that manufacturing firms operating in both types of agglomerated areas achieve higher total factor productivity levels. However, the urban areas attract a substantially larger estimated premium than the districts and, according to the evidence, employment skill distribution contributes only marginally to the urban productivity premium. In addition, the analysis of overall productivity distribution indicates that urban advantages are particularly high for the pool of most efficient firms, while the opposite is true for industrial districts. The estimated productivity surplus of industrial clusters declined significantly over the review period but remained stable for large cities. Overall, the above findings raise questions about the different capabilities of specialized clusters to prosper in an increasingly globalized world compared with urban areas.

Investing in infrastructures: which effects on the Mezzogiorno's growth?

The importance of infrastructures investments is linked to their possibility of supporting aggregate demand in the short- and mid-period and of having an important effect in the long-period, by a structural rise of production level (so-called non-keynesian effect). Methodologies adopted in literature in order to estimate such effects are various. In this paper, using the information gathered by a reconstruction of public capital stock for each region, we present the results of an econometric analysis based on a VAR (Vector autoregression) model which allows to understand the relation between public capital and GDP, considering both direct and indirect effects. Over the last 40 years, average yearly investments in infrastructures have fluctuated about 2% of GDP. Resources earmarked to the Mezzogiorno have been substantial, if compared to wealth created: in 2000, in the Mezzogiorno the ratio between the monetary stock of public capital and GDP was still equal to about 80%, i.e. the double of the Centre- North. Data show that in recent years public capital growth rate in the South of Italy has been much lower. Public capital investments are an effective instrument of growth stimulus in the long-period - though also a positive and extended response of private capital accumulation contributes to such a result. These effects are present throughout the Country, although with different intensity. In particular, this study shows that long-period GDP elasticity to infrastructure spending in the Mezzogiorno is positive and higher than in the Centre-North. Nevertheless, in the South marginal productivity of public capital is lower, due to a higher ratio between public capital stock (in monetary terms) and GDP, to which a lower efficiency of public expenditure could have contributed.