This study analyses how firms' internal variables and regional factors affect Total Factor Productivity (TFP) of Italian manufacturing firms. Due to the hierarchical structure of our data, we employ a multilevel model that allows for a clear distinction between firm and region-specific effects....

Sectoral and territorial specificities affect the firm's capabilities of being productive. While there is a wide consensus on this, a quantitative measure of the these effects has been lacking. To this end, we combine a data-set of Italian firms with some meso regional and sectoral variables and...