Regional aspects of aggregate profitability dynamics in Italy

We study aggregate profitability dynamics in Italy from 1995 to 2009, by stressing its regional trends. We make use of various analytic approaches, such as decompositions, analysis of the ranking of the profit rate of the various regions and of their coefficient of variation, as well as of a shift-share analysis. We find that the distribution of regional profit rates changed little over time and that aggregate profitability dynamics was driven by within region developments rather than by changes of the weights of the regions within the national economy. Policy and theoretical implications are discussed in the light of the previous literature of reference.