Determinants of the Italian labor productivity : a quantile regression approach

Abstract

This paper investigates how some firms’ characteristics affect the dynamics of the Italian firms’ labor productivity in recent years (1998-2004) using an original panel from the Italian National Institute of Statistics at a micro level (firm level). The original database and a quantile regression approach allow us to highlight that labor productivity is very heterogeneous and that the relationship between labor productivity and firms characteris tics is not constant across quantiles. We show that estimates obtained via GLS do not capture the complex dynamics and heterogeneity of the Italian firms labor productivity. Innovativeness and human capital, in particular, have a larger impact on fostering labor productivity of low productive firms than that of high productive firms. Finally, we focus on three highly internationalized sectors and show that innovativeness, human capital and internationalization have a role on fostering labor productivity, with large discrepancy both across industries and quantiles.