Recent Developments in Productivity and the Role of Entrepreneurship in Italy: An Industry View

This paper explores the existing interplay between productivity trends across Italian industries, in the decade 1995-2005, and entrepreneurship, highlighting the urgent need for a revival in entrepreneurial capital in some industries. Initially, we consider as a measure of entrepreneurship the birth rates for different industries; this proxy proved to be a significant explanatory variable of a sector’s efficiency. We then attempt to extract a measure of managerial ability directly from the data, considering it as an unobservable and using Bayesian techniques to perform the estimation, which further reinforces the previous results.