Quality of human and physical capital and technological gaps across Italian Regions

SCOPPA V (2007) Quality of human and physical capital and technological gaps across Italian regions, Regional Studies 41, 585-599. This paper evaluates the relative contribution of factor accumulation and technology in explaining output per worker differences across Italian regions. The contributions of physical and human capital are separately estimated through the variance decomposition of output per worker. Whereas from a basic analysis of development accounting with crude data total factor productivity (TFP) emerges as a fundamental determinant, when more accurate data are used in the estimations of human and physical capital to take into account their quality, results change radically, showing a higher importance of factor accumulation with respect to previous standard estimations.