Abstract
The aim of this work is to study the efficiency of firms operating in Calabria, a small and economically-lagging Italian region. The analysis is carried out by estimating a stochastic production frontier for an unbalanced panel of manufacturing firms which are observed over the 1998-2006 period. Results show that the efficiency score is, on average, about 60%. A declining trend is observed over the last three-year period, 2004-2006. Moreover, efficiency increases with firm age and when firms export. Inconclusive evidence is found for the role of investments in ICT and R&D. This is not very surprising given that private effort in technological activities is extremely low in Calabria (private R&D intensity was less than 0.075% of regional GDP in 2010).
Highlights
The high heterogeneity in firm performance and the persistent regional productivity gaps are some of the most debated issues in Italy [1]-[4]
Results show that Information and Communication Technologies (ICTs) and Research and Development (R&D) investments do not have any impact on the efficiency of Calabrian manufacturing firms
We find that technical efficiency (TE) is equal to almost 60% over the entire period, meaning that output can, in theory, be increased without changing the amount of any productive factor
Summary
The high heterogeneity in firm performance and the persistent regional productivity gaps are some of the most debated issues in Italy [1]-[4]. In the South of the country, the typical weaknesses of firms are exacerbated: they are, on average, much smaller than their counterparts in the Centre-North, exhibit a very low level of internationalization and underperform in every innovative activity [5]. Firm agglomeration appears to have contributed to overcoming the effects of the recent crisis, evidence shows that spatial concentration of economic activity is common in northern regions and rare in the south [6]. Within this general framework, this work focuses on the efficiency of firms operating in Calabria, the least developed Italian region [7].
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