Testing and Explaining Economic Resilience with an Application to Italian Regions

Abstract

This paper studies regional economic resilience by exploiting the properties of the nonlinear smooth-transition autoregressive model. A testing procedure to distinguish between engineering and ecological resilience is presented, and a measurement of economic resilience is provided. Regional differences in economic resilience are explained by the presence of spatial interactions and by adopting a set of determinants like economic diversity, export performance, financial constraints, and human and social capital. An empirical investigation is conducted for analysing regional employment evolution in Italy from 1992 to 2012. Some concluding suggestions propose possible future areas of research.

Local employment growth patterns and the Great Recession: The case of Spain

“…However, few empirical studies have tested for the role of human capital endowment for resilience. At the regional level there are some recent notable examples such as Crescenzi, Luca, and Milio (), Di Caro (), Giannakis and Bruggeman (), Xu and Warner (), and Bristow and Healy (). These studies find that human capital is crucial for regional resilience.…”

“…This literature provides empirical evidence that shows that the crisis has impacted differently across regions. Petrakos and Psycharis (), Psycharis, Kallioras, and Pantazis (), and Giannakis and Bruggeman () present evidence for Greece, Di Caro (, ) for Italy, Fingleton, Garretsen, and Martin () and Townsend and Champion () for UK regions, and Cuadrado‐Roura and Maroto () and Angulo, Mur, and Trívez () for Spain. These studies have used almost exclusively rather large spatial units such as NUTS 1, NUTS 2, or in some cases NUTS 3 regions for their analysis.…”

Territorial determinants and NUTS 3 regional performance: A spatial analysis for Italy across the crisis

“…As a consequence, the spatial dispersion in unemployment rates across counties decreases and the spatial correlation (clustering) also stabilizes. The uneven spatial effects of recessions on Italian employment, within a different framework, has also been explored recently by Di Caro ().…”

Industrial relatedness and regional resilience in the European Union

“…Cellini and Torrisi () examine regional growth in Italy over the 1890–2009 period and, unlike Fingleton et al (), find homogenous recovery behaviour, which explains the persistence of huge regional differences in Italy. Di Caro (, ) studies regional resilience in terms of employment in Italian regions and finds that the most resilient regions have the highest levels of industrial diversification – especially in manufacturing activities − and the highest human and social capital endowments. Lagravinese's () results are similar for the resilience of Italian regions over the 1970–2011 period and when differentiating between Northern and Southern Italy in relation to performance and industry composition.…”