Structural change and productivity revolutions: Some hints from the Italian case, 1979–2016

Abstract

The reallocation of resources between sectors is classically regarded as the engine of long-term growth. The different technological opportunities and the inherent levels of productivity that characterise each sector explain why changes in sectoral composition trigger development processes. Conversely, in the short run, productivity growth is associated with differentiation processes among firms operating in the same industry. The recent debate on the decline in Italian productivity has mainly focussed on short-term interpretations. Using a new dataset on the largest Italian companies between the 1970s and the 2010s period, the paper examines the role of structural change in determining productivity changes.