Marco Percoco

Airport Activity and Local Development: Evidence from Italy

The role of infrastructure as a factor of growth and development of countries and regions is often considered to be crucial. Among the various types of transport infrastructure, airports are considered as particularly strategic because of the increasing importance of air transport in connecting territories. This paper studies the impact of airports on Italian provinces. To this end, it builds on the framework proposed by Brueckner, where sectoral employment is regressed on a series of controls and on airline traffic. That framework is extended to take account of selection bias due to the location choices of airports and spatial spillover effects. It is found that the elasticity of service-sector employment to airport passengers is 0.045 and that of spillover effects due to neighbouring airports is almost 0.017.

The European Regional Growth Process Revisited

Abstract With the 2004 enlargement to the East, the EU regional growth process can no longer be seen in the frame of the traditional core–periphery pattern. This is why this article proposes an innovative methodology to endogenously detect convergence clubs while accounting for spatial autocorrelation across regions. Our model is estimated on 244 EU25 regions over 1991–2003. Our results indicate that four distinctive clubs are present in our sample. In addition, the model we use does not rely on the traditional neoclassical model but on Verdoorns law, which allows us to account for the presence of increasing returns to scale. Our conclusions give new insights for policy makers interested in convergence and regional policies developed to promote it.

Selective Migration, Regional Growth and Convergence: Evidence from Italy

Fratesi U. and Percoco M. Selective migration, regional growth and convergence: evidence from Italy, Regional Studies. This paper studies the link between regional disparities and migration flows, focusing on the skill content of migration. Disparities may lead to migration, which should reduce them; but at the same time if migration is skill-selective, it may have an opposite effect and reinforce the richest regions. The object of this empirical analysis is Italy, a country where unskilled interregional migration flows were a large and very well-known phenomenon during the 1950s and 1970s, whilst in recent years, after three decades of very low labour mobility, thousands of Southern graduates have been moving to Northern regions. What is the economic impact of those flows of selective migration? Using data covering the period 1980–2001, it is found that although a slight process of convergence occurred between Italian regions, the loss of human capital in the South was detrimental to regional growth.

Path dependence, institutions and the density of economic activities: Evidence from Italian cities†

In recent years a growing body of literature has begun to consider the possible presence of path dependence in the development processes of countries. This phenomenon has always been recognized in regional and urban studies because the path of development almost naturally follows a history-dependent spatial diffusion influenced by both physical geography and the quality of institutions. In this paper, I consider the case of firm concentration in Italy and its impact on local development. A large and growing literature has argued in favour of persisting effects of past institutions on current outcomes. Hence, in order to identify the impact of firm density on income, I use instruments from the history of a set of Italian cities: namely the presence of a university and status as a free-city state in the Early Middle Ages. I first show that those two variables had an important effect on the process of urban development between 1300 and 1861, together with favourable geographic conditions. Then, when I use these instruments to predict firm density, I find that the elasticity of income to firm density is close to 0.1. This result is interpreted as providing evidence of the historical roots of agglomeration economies in Italy.

A social discount rate for Italy

Because of the budgetary constraints imposed by the Stability and Growth Pact, the need for cost and benefit evaluation of public investment has become increasingly relevant. In a cost-benefit analysis framework, the definition of the social discount rate is key to the selection of projects and programmes on the basis of their socio-economic return. To this extent, the Italian Ministry of the Economy has passively adopted the 5% rate proposed by the European Commission to evaluate projects financed by Structural Funds. In this article, we estimate a social discount rate for Italy, finding that a 3.7–3.8 rate would be appropriate, thus 1.2–1.3% lower than the official one.

Service industry and cumulative growth in the regions of Europe

European regions have experienced a greater presence of service producers in their economy over the last few decades. Indeed, the manufacturing sector increasingly contracts out many activities to intermediate producer services. This is mostly because they are located close to each other and because services experience increasing returns to scale which reduce their marginal costs. In this paper, we propose to measure the extent to which productivity in services has converged across European regions. The model we use, originally developed by Verdoorn (1949), takes the increasing returns to scale explicitly into account. We apply spatial econometric techniques and control for border effects by introducing two different spatial weights matrices under the assumption that economic interactions decrease very substantially when a national border is passed. Furthermore, we take proper care of the presence of both types (spatial and non-spatial) of endogeneity by using spatial two stages least squares (Kelejian and Prucha 1998). Our conclusions bring new insights in the identification of regional productivity differentials.

A Note on the Inoperability Input-Output Model

In this note, we propose some comments and some extensions of the inoperability input-output model (IIOM), as recently proposed by Santos and Haimes (2004). In particular, we propose the use of some analytic tools capable of providing information on the reaction of sectors subsequent to a terrorist attack on infrastructure service sectors. These tools, namely, the field of influence and the multiplier product matrix, provide information on the way sectors react to a shock on the aggregate demand and/or to a (temporary or permanent) change of production function coefficients. Finally, using the 2003 65 sectors input-output matrix for the U.S. economy, a simple empirical example is presented.

Infrastructure and economic efficiency in Italian regions

Using the stochastic frontier approach based on Farrels index to measure technical and allocative efficiency, we investigate the level of productive efficiency in Italian regions for the period 1970–1994. We found a 31% of technical inefficiency and about 21% of allocative inefficiency. The analysis is extended to measure the impact of public capital puzzle on regional productivity. The results show that infrastructure play an important role and that railways and maritime capital have an higher degree of effectiveness than the provision of roads.

Structural change decomposition through a global sensitivity analysis of input-output models

Abstract Sensitivity analysis has become an important tool to test the robustness of estimated economic models. In this paper we propose the use of simulation-based sensitivity analysis to identify the fundamental structure of the economy. To show the possibilities of this technique, we provide empirical evidence on the path of structural change occurring in the Chicago economy by running simulations for projected input–output tables over the period 1975–2010.

The impact of European Cohesion Policy in urban and rural regions

ABSTRACT The impact of European Cohesion Policy in urban and rural regions. Regional Studies. This paper presents an evaluation exercise on the impact of European Cohesion Policy on the economic performance of the most disadvantaged European areas (Objective 1 regions) for the programming period 2000–06. By performing the analysis at NUTS-3 rather than NUTS-2 level to exploit the exogeneity of the treatment status in the context of a regression discontinuity design (RDD), the analysis shows that European Cohesion funds have positively contributed to generating economic growth in lagging areas. However, their effect is mainly driven by the successful performance of rural areas close to the main urban agglomerates. Favourable geography and the progressive suburbanization of the rural landscape created new opportunities for rural areas close to cities, thus boosting the effect of the policy.