Total factor productivity convergence amongst Italian regions: some evidence from Panel Unit Root Tests

Abstract

In this paper, we employ panel unit root tests to investigate convergence in Total Factor Productivity amongst Italian regions. These tests provide us with inference valid in the presence of heterogeneity and cross-sectional dependence, and when the cross-sectional dimension is smaller than the time dimension, allowing us to investigate convergence among different subset of regions. Our results add a futher dimension to the conventional view on growth dynamics in the Italian peninsula depicting a lack of regional TFP convergence not only at the national level, but also at the level of geographical disaggregations where regions are conventionally thought to converge.