Eleonora Cutrini

The paper studies the characteristics that affected firms’ ability to react to the economic crisis induced by the COVID-19 pandemic. We use firm-level data on Italian manufacturing companies to examine the role played by external relations and the characteristics of the local environment. In line with recent works, the study finds that micro-firms, highly indebted and less productive firms have a higher probability of exiting the market. Results also support the view that digital presence and financial soundness have favoured the survival of enterprises. Beyond firm-specific factors, we highlight that a firm’s resilience capability is related to its external linkages, namely the participation in a group or to a network contact. As for local ecosystem factors, we confirm the importance of agglomeration externalities associated with an innovative local environment in mitigating the probability of permanently closing during the crisis.

This paper investigates how institutional quality and its components (quality, impartiality, and control of corruption) are associated with the economic recovery in the aftermath of the global recession (2010–2016). The evidence suggests that the postcrisis dynamism of a region depends on whether its economy is accompanied by a good governance at the local level. The results also show the heterogeneity in the effects of institutional characteristics and other traditional determinants of growth for the high‐income club (core) and the low‐income club (periphery), respectively. This evidence can provide indications to define ad hoc policies apt to mitigate the recent surge in inequality among EU regions.