Sergio Destefanis

Public capital and total factor productivity: New evidence from the Italian regions, 1970–98

Destefanis S. and Sena V. (2005) Public capital and total factor productivity: new evidence from the Italian regions, 1970–98, Regional Studies 39 , 603–618. This paper analyses the relationship between industrial total factor productivity and public capital across the 20 Italian administrative regions. It adds upon the existing literature in a number of ways: it analyses a longer period (1970–98); it allows for the role of human capital accumulation; it tests for the existence of a long‐run relationship between total factor productivity and public capital (through previously suggested panel techniques) and for weak exogeneity of public capital; and it assesses the significance of public capital within a non‐parametric set‐up based on the Free Disposal Hull. The results confirm that public capital has a significant impact on the evolution of total factor productivity, particularly in the Southern regions. This impact is mainly ascribed to the core infrastructures (road and airports, harbours, railroads, water and electricity, telecommunications). Also, core infrastructures are weakly exogenous.

Matching Efficiency and Labour Market Reform in Italy: A Macroeconometric Assessment

A matching theory approach is utilised to assess the impact on the Italian labour market of the 1997 legge Treu, which considerably eased the regulation of temporary work and favoured its growth in Italy. We re-parameterise the matching function as a Beveridge Curve and estimate it as a production frontier. We find huge differences in matching efficiency between the South and the rest of the country. The legge Treu appears to have reduced unemployment in the more developed regions of the country but did not greatly affect the matching efficiency of the regional labour markets.

Exports, Supply Constraints and Growth: An Investigation using Regional Data

In this work we first model the role of demand‐ and supply‐side factors (labour market adjustment, productive efficiency) in explaining economic growth. Empirically testing the model, we evaluate why different growth regimes may appear in the 20 Italian administrative regions. This exercise uses a two‐stage econometric approach. Estimates for the elasticity of manufacturing output to exports are obtained from regional time series: a significant long‐run relationship indicates the existence of a demand‐constrained growth regime. We then ascertain whether the regional dispersion of supply‐side factors has an impact on the regional dispersion of growth regimes. The empirical evidence supports our expectations of strong regional differences. Southern regions are less likely to display demand‐constrained regimes. In explanation of these differences, second‐stage analysis reveals that a strong role is played by such efficiency‐enhancing factors as technological innovation, bank diffusion and ‘social capital’. No role is found for labour market rigidities.

Wages and Monetary Policy in Italy before and after the Wage Agreements

We examine the influence of the 1992 and 1993 wage agreements on the disinflation experienced in Italy through the 1990s, providing econometric estimates both for the reaction function of the Bank of Italy and for 2-digit industry wage equations. We rely on industry-level measures for the degree of indexation, and find that, after the agreements, wage setters became more forward-looking and expectations were to some extent influenced by the target rate of inflation. The relationships between wages and the other main labour market variables were not much affected by the agreements.

Labour‐market performance in the OECD: some recent cross‐country evidence

Purpose - The purpose of this paper is to assess the evolution of labour-market performance in the Organization for Economic Co-operation and Development (OECD) over the last decade, considering the robustness of the claims made in an important OECD follow-up study. Design/methodology/approach - The paper sets up an empirical framework calibrated on an important OECD follow-up study, and suggests some ways in which the impact of unobserved heterogeneity and outliers on policy estimates can be treated in a cross-section framework. The framework applies to the data for 30 OECD countries. Findings - The paper finds that changes in labour-market performance are inversely linked to lagged unemployment. Changes in the share of construction workers are also significant even in the presence of various kinds of policy change indicators. As far as the latter are concerned, the results highlight the role of unemployment benefits and, especially, active labour-market policies. Research limitations/implications - The kind of policy change indicators used do not allow the adoption of panel data techniques. Practical implications - An important policy role seems to emerge for unemployment benefit reforms and, even more so, active labour-market policies. The evidence also supports the contention that the construction sector is important for labour-market performance. Originality/value - The paper brings to the fore novel evidence about cross-country labour-market performance at a time when this issue is of high interest for citizens and policy-makers.

Financial development and local growth: evidence from highly disaggregated Italian data

We test the nexus between local financial development and economic growth upon Italian data highly disaggregated at the territorial level, paying particular attention to the role of local banking market structure. We specify a growth model where a qualitative measure of financial development, bank profit efficiency, is considered in conjunction with a customary quantitative measure of financial development. The model is estimated on panel data over the period 2001 to 2010. The evidence suggests that both indicators of financial development have a significant impact on GDP per worker, especially when considering areas characterized by a larger number of cooperative banks. Results are not much affected by the occurrence of the ongoing recession.

Paid and Unpaid Labour in the Social Economy

This book provides an up-to-date analytical and empirical treatment of some important interactions between paid and unpaid labour and the social economy. The emphasis on the motivations for paid and unpaid labour, and on how these factors contribute to efficiently providing social services, gives a clear empirical counterpart to the concept of social economy. The book begins with a theoretical perspective on the development and characteristics of paid and unpaid labour in social services. Several empirical analyses, largely using novel data sets, are then provided about these phenomena in Italy, a country which has drawn broad international attention in this field, as well as in other European countries and in the US. Topics of particular interest include: preferences regarding and satisfaction with paid and unpaid labour; ownership structure and risk; ownership structure, remuneration and incentives for paid labour; characteristics of volunteer labour and its relationship with social capital endowment across Italian regions; and a comparative analysis of labour in the nonprofit sector across Europe.

Unit Root and Cointegration Tests for Cross-sectionally Correlated Panels. Estimating Regional Production Functions

There is a plethora of studies of regional production functions using stationary panel data. Only some recent works consider non-stationary panel data. All of them assume the hypothesis of cross-section independence. Here, we claim that the independence assumption is too strong when regional data are used. In this paper, the cross-section independence assumption is released and cross-sectional dependence is assumed. First, unit roots and cointegration properties of the panel dataset are properly investigated by using newly developed tests for cross-sectionally dependent panels. Second, dynamic OLS (DOLS) and recent regression models for cross-sectionally correlated panels are used to estimate the cointegrated relationship between value added, physical and human capital, for Italian regions over the period 1970-1998.

Measuring cross-country technological catch-up through variable-parameter FDH*

In this paper, we estimate indices of technological catch-up for a sample of 52 countries through the FDH approach with variable scaling parameters proposed in Kerstens and Vanden Eeckaut (1999). We show that this technique has significant advantages for the international comparisons of productivity and, more generally, wherever the assumption of convexity for the production set is not likely to be appropriate.

Central Bank Independence and Democracy: Does Corporatism Matter?

In this paper we test the hypothesis that central bank independence is closely correlated to social agreement about decisions on income distribution. Using data from a panel of OECD countries over the period 1972-2002 and controlling for several macroeconomic factors, we find evidence in favour of this hypothesis. When some indexes of corporatism are used to allow for the degree of social agreement on income distribution and its determination, the relationship between inflation and CBI weakens considerably. This evidence is consistent with the mechanism posited in Pittaluga - Cama (2004) according to which society formally endows the central bank with independence in order to safeguard a key principle of democracy, namely that decision-makers should be clearly responsible for their choices and actions.