Convergence in TFP among Italian Regions - Panel Unit Roots with Heterogeneity and Cross Sectional Dependence



GDP. Very little attention, on the other hand, is dedicated on TFP.3 We be-
lieve that this is an important limitation of the existing literature. TFP
reflects a wide array of both tangible and non tangible factors that influence
the efficiency of the economy, and production in particular. Since the persis-
tence of the spatial differences in Italy can largely be rooted in the efficiency
of the production system, TFP is a variable that requires the necessary at-
tention.

The importance to look at TFP stems also from the need to look at the
persistence (hence the structural nature) of the process of convergence . In
comparison with previous papers, this study captures also the more recent
evidence using data spanning from 1970 until 2001. We root our methodology
in the work of Evans e Karras (1996), who try to analyse the process of
convergence among US states through the identification of a common trend.
Evans e Karras (1996) introduce a particular notion of convergence, claiming
that the different economies converge if and only if there exists a common
trend such that

Et (y-n,t +1 _ at+1) = μ-n                            (1)

Moreover, if μn = 0, convergence is absolute, and if μ = 0, convergence is
conditional. This methodology has been applied to Italian regions by Mar-
gani and Ricciuti (2001) to analyse the process of convergence in regional per
capita GDPs during the period 1951-1998. These authors estimate a high
rate of convergence for the entire period, but reject the hypothesis of abso-
lute convergence and accepting that of conditional convergence. Moreover,
they break the period into two sub-periods going from 1951 to 1973 and 1974
to 1998, and find evidence of absolute convergence for the first period and
divergence for the second, a result already reached by other studies. How-
ever, with respect to the analysis of clubs of convergence their results are
less conclusive. This is unfortunately a general feature of the literature on

3Only recently we can record some exceptions. See, for example, Di Liberto, Mura,
Pigliaru (2003, 2004).



More intriguing information

1. If our brains were simple, we would be too simple to understand them.
2. Are Public Investment Efficient in Creating Capital Stocks in Developing Countries?
3. Surveying the welfare state: challenges, policy development and causes of resilience
4. SOCIOECONOMIC TRENDS CHANGING RURAL AMERICA
5. ANTI-COMPETITIVE FINANCIAL CONTRACTING: THE DESIGN OF FINANCIAL CLAIMS.
6. Naïve Bayes vs. Decision Trees vs. Neural Networks in the Classification of Training Web Pages
7. GROWTH, UNEMPLOYMENT AND THE WAGE SETTING PROCESS.
8. The Challenge of Urban Regeneration in Deprived European Neighbourhoods - a Partnership Approach
9. The name is absent
10. Gender and headship in the twenty-first century