The Role of Territorial Capital in Local Economic Growth: Evidence from Italy

Abstract

Territorial capital is defined as the system of territorial assets of economic, cultural, social and environmental nature that ensures the development potential of places. The potential of this concept resides in the recognition of possible interactions between factors of different nature. So far, however, very few studies have focused on the empirical verification of the links between territorial capital and economic growth. This work is devoted to the analysis of the relationship between economic growth and territorial capital in Italian NUTS3 regions between 1999 and 2008. The distribution of territorial assets across regions points out the huge gap between Italian macro-areas. These divergences do not clearly reproduce the differentials in GDP growth. The second part of the analysis is focused on the joint effect of the territorial capital components on the regional economic performance. Our findings emphasize the role of some endogenous factors in explaining the differentiation of regional growth patterns. Moreover, they point out the importance of soft assets in correspondence of an external shock, as the one represented by the recent financial crisis.