Professor Fabiano Schivardi, Luiss Deputy Rector for Research, has won the most prestigious individual European grant in the field of Social Studies and Humanities financed by the European Research Council, for his ISEProD, Industrial Structure and the European Productivity Growth Divergence.
With nearly €2 million over five years, Professor Schivardi’s project aims to develop a new interpretation of the relationship between an enterprise’s property, management and financing as well as growth in productivity. The final goal of the project is to contribute to the key debate on the future of the European Union, characterized by the divergence in productivity between Northern and Southern Europe.
Divergent productivity and a single currency cannot coexist: productivity in the South must increase. Currently, the most prevalent theories in the debate state that Southern Europe is behind in terms of structural reforms. However, recent evidence demonstrates that the divergence is growing, despite important steps being made in Southern Europe.
Professor Schivardi’s project proposes an alternative hypothesis: Southern Europe is characterized by small companies with less capital, run by entrepreneurs with a lower average level of education. This structure worked well until the end of the 90s. Since then, however, the competitive context has changed: international competition has increased from emerging countries. Even more decisive, there has been a chance in the nature of technological progress, with increasing importance placed on digital and immaterial capital.
This revolution has radically changed strategic and managerial models, putting the structure of the Southern European economy at a disadvantage. To remain competitive, Southern Europe needs larger companies, with more educated leaders, financed by less risky capital: in one word, more “sophisticated.”
“Property, control and finance play a key role, and their importance, alongside technological development, has grown over time,” affirms Deputy Rector of Research Fabiano Schivardi. The project is combining new sources of data (including data produced through the project itself), economic models and avant-garde econometric methods to investigate the causes and consequences of the diversity in industrial structures between European countries. In addition to scientific results, the project aims to offer useful information to policymakers, in order to contribute to more efficient policy to create more balanced growth.