We analyze the effect of firm heterogeneity on regional business cycle differentials. Using monthly firm-level data for Italy and estimating discrete-response models, we document sizeable and countercyclical differences in amplitude between the Northern and the Southern business cycles. We explore the role of sectoral mix and several firmspecific factors in explaining regional business cycle gaps. Results suggest that regional differences in sectoral composition are not responsible for these discrepancies, whereas firm-level heterogeneity explains 50% of the North-South gap. These results are robust to controlling for (i) firm fixed effects, (ii) spatial fixed effects and (iii) simultaneity bias.

Firm heterogeneity and regional business cycles differentials

Basile, Roberto
Conceptualization
;
2014-01-01

Abstract

We analyze the effect of firm heterogeneity on regional business cycle differentials. Using monthly firm-level data for Italy and estimating discrete-response models, we document sizeable and countercyclical differences in amplitude between the Northern and the Southern business cycles. We explore the role of sectoral mix and several firmspecific factors in explaining regional business cycle gaps. Results suggest that regional differences in sectoral composition are not responsible for these discrepancies, whereas firm-level heterogeneity explains 50% of the North-South gap. These results are robust to controlling for (i) firm fixed effects, (ii) spatial fixed effects and (iii) simultaneity bias.
File in questo prodotto:
Non ci sono file associati a questo prodotto.

I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.

Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11697/124263
Citazioni
  • ???jsp.display-item.citation.pmc??? ND
  • Scopus 12
  • ???jsp.display-item.citation.isi??? 8
social impact