Innovation and Productivity of Italian Firms: Evidence and Policy

This work is a collection of three essays about innovation and productivity of Italian firms. In the first chapter, we show that the historical North-South gap of the country has a relationship with firm-level productivity, which are more heterogeneous in the South than in the North. We find that new and more productive firms systematically self-select in the NUTS 3-digit locations where more productive firms are already present, even after controlling for agglomeration economies, and other classical determinants of firm location. The second essay analyzes how knowledge spillovers can influence firm productivity. As compared to the previous literature in which spatial econometric models are used to investigate local geographical spillovers, we consider interfirm relationships. In particular, we focus our attention on the network of interlocking directorates. We find that a spatial model which includes interlocking directorates as well as distance performs better than traditional models of localized knowledge spillovers. We find that interlocking directorates play a crucial role for knowledge spillovers in science-based industries. The third chapter studies the impact of Italian Law 221/2012 (i.e. "Startup Act"), which provides benefits for innovative, small, and young companies, in the aftermath of the Great Recession. We find that the Startup Act has met its main goals. In particular, we find that the positive effects on value-added and productivity continue even after the treatment period.