Abstract

This paper analyzes the trend of industrial productivity in Italy in the decade preceding the 2008 crisis and compares manufacturing sectors in North East regions with other areas of the country, using a large database of manufacturing firms. The Malmquist productivity growth index is calculated by means of a robust non-parametric approach and decomposed into the two components of technical change and efficiency change. The results show that the index components follow different patterns in subperiods: before 2000 the productivity slow-down is due mainly to the technological change component, while in the years 2003-2006 we observe a technological advancement that is partly eroded by a growing inefficiency. These empirical evidences seem to reconcile two alternative views, the one highlighting the regress of Italian manufacturing and the other emphasizing the existence of a dynamic tier of medium size firms, that have emerged in the interpretation of the evolution of Italian industry in the last decade.