| Summary: | <p>This study analyzes the labour productivity for the Italian regions estimating the Sylos Labini's function. In this function, in dynamic term, the labour productivity depends positively on market (Smith effect), on unit labour cost (organization's effect), on difference between wages and prices of machine (Ricardo effect) and past investments, while it depends negatively on current investments (disturbance effect). According to the estimates, for the Italian regions, these three effects are significant; moreover the dimension of these effects are conditioned by sector and territorial peculiarities. In particular, the Smith effect could be determined by the phenomenon of labour hoarding for which during recession entrepreneur prefers to reduce utilization of workers that fire them. Finally, the significance of investments could be caused by an important multicollinearity between present and past investments.</p><p> </p><p> </p><p><strong>JEL Codes:</strong> O14, R11</p><p> </p>
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