Italy’s decline and the balance-of-payments constraint: a multicountry analysis

According to the literature, the decline experienced by the Italian economy in the last two decades depends on a slowdown of its labour productivity, starting in the 1990s. The supply-side explanations of this slowdown are inconsistent with the major stylised facts. In this paper, we verify whether a better explanation is provided by the effect of a negative demand shock, through Italy’s external constraints, in the framework of Kaldor-Dixon-Thirlwall’s cumulative growth model. To this end, we use a multi-country generalisation of Thirlwall’s balance-of-payments-constrained growth model, which allows us to investigate the contribution of Italy’s main trade partners to Italy’s long-run growth from 1970 to 2010. The trade partners are disaggregated into seven groups: Eurozone core, Eurozone periphery, United States, other European countries, OPEC countries, BRIC, and the rest of the world. The results show that Italy’s long-run growth has been consistent with the Bop-constraint, that its decline can be explained by a progressive tightening of this constraint, that the sudden slowdown of labour productivity in the 1990s corresponds to a major shock on Italy’s external constraint, and that the major contributions to this shock came, through different channels of transmission, from the core Eurozone countries and from OPEC countries.     

Measuring patterns of specialization using trade in value added: the case of manufacturing in Italy

This article aims to contribute to the long-standing debate on the ‘anomaly’ of Italy’s specialization in manufacturing by providing fresh analysis based on new data. It offers: 1) a comprehensive survey of Italian comparative advantages measured in value-added terms and their evolution over time; 2) an international comparison of these advantages with Italy’s main competitors. Results show that the country’s traditional comparative advantages are substantially confirmed, a genuine capacity of the Italian domestic production factors to maintain added value in production with comparative advantage can be observed and new trends in terms of specialization and competitors are also highlighted, showing the influence of the international fragmentation of production on trade and specialization.     

CHARTERS,PARTNERSHIPS AND NATURAL RESOURCES: TWO CASES OF ENDOGENOUS REGULATION IN ITALY

This paper illustrates two examples of natural resources management drawn from Italian history: the rural charter system in the current province of Trento and the rural partnership system in Nonantola in the province of Modena. These institutions lasted for many centuries, and survived and evolved in the contemporary legal system. It is concluded that both the cases can be defined as ‘robust’ institutions for the successful management of common pool resources.     

The innovation–trade nexus: Italy in historical perspective (1861–1939)

This work investigates the relationship between trade and technological specialisation in Italy, during the long time span ranging from Unification to the eve of the Second World War. To do this, new series of Italy’s indices of specialisation in trade and technology are calculated based on official data. Empirical analysis, based on Spearman rank correlation coefficients and fixed-effects regression, shows the emergence of a positive relationship between specialisation in technology and specialisation in trade after the start of the country’s modern economic growth, around the turn of the twentieth century. This, however, was uniquely driven by a negative relationship between technological specialisation and import shares, while no significant relationship between the former and export shares emerges. Furthermore, this finding excludes the most important sector, leading Italian industrialisation, that is, textiles, the outstanding performance of which can be seen as largely determined by its being particularly suited to the country’s factor endowment.     

Human resource management and industrial relations in Italy

Evolution of industrial relations and human resource management in Italy in the last decade is analysed through qualitative case studies, quantitative surveys and a combination of qualitative/quantitative data originating from network researches.

In the 1980s, complementary industrial relations/human resource management in Italy were based on the trade-off between employment security, work flexibility and industrial adjustment. In the 1990s this complementarity is under pressure from a second restructuring process (and privatization) of Italian enterprises.

The last surveys underline that the basic features of industrial relations were not altered, but the data confirm the critical importance of the relationship between industrial relations and human resource management and also the fragility of this balance.     

Migration and inbound tourism: an Italian perspective

This paper investigates the impact of migration on Italian inbound tourism flows in a dynamic panel data framework. Arrivals, expenditure and nights from 65 countries are analysed for the period 2005–2011. The migration variable is defined at both origin and destination in order to assess the pushing and pulling forces. Estimates were performed using both aggregated flows and flows disaggregated to separate the visiting friends and relatives (VFRs) from two non-VFR categories, namely holiday and business. The results suggest the presence of a strong migration-tourism nexus, which clearly goes beyond VFRs. Moreover, the effects of the different determinants vary according to the way in which the tourism market is segmented and, within each segment, to the way in which tourism demand is measured.     

L-carnitine in the management of patients after acute myocardial infarction: a cost effectiveness analysis in Italy

Summary

The prevalence of acute myocardial infarction (AMI) is estimated at 500,000 individuals in the Italian population; the annual incidence can be crudely estimated at 100,000 events. This represents a major healthcare problem and generates questions about the rational allocation of public resources devoted to healthcare, since in Italy there is a National Health Service. We focused on modelling the possible economic consequences of adding L-carnitine administration to the standard care of AMI patients in Italy, by extrapolating the results obtained in the SAVE trial and matching entry criteria from the CEDIM and SAVE studies. The cost-effectiveness ratios were explored using different assumptions of the effectiveness and cost of the intervention under analysis. In our base case, administering L-carnitine had an Incremental Cost/Effectiveness Ratio of 28.2 and 22.2 million Lira per life year saved (LYS), respectively, depending on whether discounted or non-discounted benefits were used in this model. The results were sensitive to both the cost and effectiveness of L-carnitine.     

Informal information flows in organizations: The role of the Italian coffee break

Research on information flows within companies has focused on codified formalized information management tools. In practice, it is questionable whether IT-based management systems for storing and disseminating internal information in organizations are sufficiently used by the staff. As an alternative to centralized forms and instruments of information management, there are also informal and dialogic forms, such as the “coffee break” well known in Latin companies: employees come together spontaneously and thus contribute to “natural” internal fluid information circulation. Based on an empirical study conducted in Italian companies, this paper describes essential functions of the coffee break – as a dynamic inter-divisional and heterarchic organizational practice: these include coordination of work processes, confidence building, networking, problem solving, and extension of the meta-knowledge on organizational processes and structures. The paper contributes to the literature on information management by taking into account contextual elements.     

Currency depreciations and the U.S.–Italian trade balance: Industry-level estimates

As one of the indebted Southern European countries that have put pressure on the Euro in recent months, Italy would benefit from a reduction in its external trade deficit. One channel could be through a weakening of its currency—which would only work if the Euro depreciated against the currency of an outside importer, such as the U.S. dollar. This study examines the response of the trade balances of 106 individual industries to such depreciations, using annual data and applying cointegration analysis. We find that only 19 industries register a long-run improvement, with these concentrated in miscellaneous manufactures (SITC sector 8). Two major products in the automotive industry—petroleum and road motor vehicles, show evidence of a “J-curve” effect.     

In search of a new industry: Giovanni Battista Pirelli and his educational journey through Europe, 1870–1871

Knowledge is increasingly considered a crucial resource for economic and business development. However, it is a broad concept that calls for further specifications: different kinds of knowledge call for diverse transfer and learning mechanisms, crucial for their application to economic activity. Focusing on the case of Giovanni Battista Pirelli (1848–1932) – Italian engineer and entrepreneur, founder (1872) of the first Italian rubber company, G.B. Pirelli & Co. – and his educational journey through Europe (1870–1871), this article investigates the complexity of the learning mechanism which in the second half of the nineteenth century allowed a relatively peripheral region like Northern Italy to reduce the gap separating it from the centre of European industrialization. Special attention is devoted to the characteristics of the rubber manufacturing industry and to the specific difficulties encountered in the acquisition and transfer of knowledge (including technology) related to a relatively new and rapidly evolving industry.