Explaining the productivity gap between Centre-Northern and Southern industry is still a central issue in the debate on the relative lag of Italian Mezzogiorno. In this investigation I use the unique UniCredit-Capitalia survey database on a stratified sample of Italian manufacturing firms for the years 1995-1997, 1998-2000 and 2001-2003 (with an overall number of twelve thousand two hundred and sixteen observations). Micro-level data are aggregated at provincial level to carry out an application of the shift-share analysis aiming at pointing out magnitude and role of structural, geographical and allocative components in the provincial gap of labour productivity. Consistent with most of the previous literature, geographical factors come out to be the main determinants of differences in the labour productivity in Italy. Results show that specific characteristics of manufacturing firms concerning industry, size and international opening affect the provincial gap in labour productivity much less than localization factors connected to institutional environment and endowments of human capital, social capital and local infrastructures.
Keywords: Differenza di produttività, Mezzogiorno, analisi shift-share
Jel Code: L23, O14, O15