Fazio, Giorgio and Maltese, Enza and Piacentino, Davide (2011): Estimating Verdoorn law for Italian firms and regions.
Download (229kB) | Preview
In empirical regional economics, returns to scale are typically estimated at the regional level in search for evidence on alternative theories of growth and agglomeration. However, returns to scale may also have a firm-level dimension. In this paper, we exploit micro level data and estimate the dynamic Verdoorn law in a multilevel-setting, where returns to scale are obtained simultaneously for the micro and the regional level. Using Italian firm-level data and the NUTS-3 level of aggregation, we estimate the classic and augmented versions of Verdoorn law for all sectors and separately for manufacturing. Our results show that increasing returns to scale co-exist at both levels, with some degree of regional heterogeneity across the Italian peninsula.
|Item Type:||MPRA Paper|
|Original Title:||Estimating Verdoorn law for Italian firms and regions|
|Keywords:||Returns to scale, Verdoorn Law, Multilevel models, Italian firms|
|Subjects:||O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O47 - Empirical Studies of Economic Growth ; Aggregate Productivity ; Cross-Country Output Convergence
C - Mathematical and Quantitative Methods > C3 - Multiple or Simultaneous Equation Models ; Multiple Variables > C31 - Cross-Sectional Models ; Spatial Models ; Treatment Effect Models ; Quantile Regressions ; Social Interaction Models
R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R1 - General Regional Economics > R12 - Size and Spatial Distributions of Regional Economic Activity
R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R1 - General Regional Economics > R11 - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
|Depositing User:||Davide Piacentino|
|Date Deposited:||13. Dec 2011 21:13|
|Last Modified:||20. Feb 2013 16:56|
Angeriz, A., McCombie, J. and Roberts, M. (2008) New estimates of returns to scale and spatial spillovers for EU regional manufacturing, 1986-2002, International Regional Science Review, 31, 62-87.
Bianchi, C. (2003) A reappraisal of Verdoorn's law for the Italian economy, 1951-1997, in Productivity Growth and Economic Performance, Essays on Verdoorn’s Law, (Eds) J. McCombie, M. Pugno and B. Soro, Palgrave, Palgrave, Houndsmills, pp.115-135.
Britto, G. (2008) Productivity growth and space: a multilevel Verdoorn model, Cambridge Centre for Economic and Public Policy, Working Paper No.03-08, University of Cambridge, Cambridge.
Byrne, J., Fazio, G. and Piacentino, D. (2009) TFP Convergence among Italian Regions: some evidence from panel unit root tests, Regional Studies, 43, 63-76.
Fingleton, B. (2001) Equilibrium and economic growth: spatial econometric models and simulations, Journal of Regional Science, 41, 117–147.
Harris, R.I.D. and Lau, E. (1998) Verdoorn’s law and increasing returns to scale in the UK regions, 1968-91: some new estimates based on the cointegration approach, Oxford Economic Papers, 50, 201-219.
Kaldor, N. (1966) Causes of the Slow Rate of Economic Growth in the United Kingdom: An Inaugural Lecture, Cambridge University Press, London.
Leόn–Ledesma M. A. (2000) Economic growth and Verdoorn’s law in the Spanish regions, 1962-1991, International Review of Applied Economics , 14, 55-69.
Levinsohn, J. and Petrin A. (2003) Estimating production functions using inputs to control for unobservables, Review of Economic Studies, 70, 317-341.
McCombie, J. (1982) Economic growth, Kaldor’s laws and the static-dynamic Verdoorn law paradox, Applied Economics, 14, 279-294.
McCombie J., Pugno M. and Soro B. (2003) Productivity Growth and Economic Performance, Essays on Verdoorn’s Law, Palgrave Macmillan, Houndsmills.
McCombie J. and Roberts M. (2007). Returns to scale and regional growth: the static-dynamic Verdoorn law paradox revisited, Journal of Regional Science, 47, 179–208.
Rowthorn R. E. (1979) A note on Verdoorn's law, The Economic Journal, 89, 131-133.
Verdoorn, P.J. (1949) Fattori che regolano lo sviluppo della produttività del lavoro, L’industria, 1, 3-10.
Young, A. (1928) Increasing returns and economic progress, The Economic Journal, 38, 527-542.