Territorial Capital and the Great Recession: a Nuts-3 Analysis for Central and Southern Italy

The analyses on the effects of the actual crisis have been mainly concentrated on a national and international dimension, leaving aside the differential effects of the crisis on regions and sub-regional areas. Notwithstanding the international character of the Great Recession, it has to be stressed that the different structural features of regions and urban areas might influence the economic and social impact of the crisis. They also might have an important effect on the resilience and recover chance. In the present paper, we focus on territorial capital, a concept that takes into account of the different features of goods and services in terms of their degree of appropriability and rivalry and, also, of their material-immaterial content. The aim is to identify the strategic territorial elements which help in the evaluation of the absorption capacity of the recession at regional and sub-regional levels. For that purpose, we use a wide dataset for Central and Southern Italian provinces in order to measure the empirical relations between the territorial capital and the change in the provincial performance. The intent is to measure how the territorial capital endowment might have determined different reactions on a sub-regional scale and, conversely, how the crisis might influence the territorial capital in different areas. If, on one hand, we expect that the “soft” dimensions of the territorial capital (relations among firms, cooperation networks, public-private partnership, territorial governance, innovation linkages, and so on) have some relevance in shaping the growth process of less developed and peripheral areas, the role of these dimensions in the reaction to crisis is still to be debated. The paper examines the relation between territorial capital and performance at NUTS-3 (provincial) level. during the period 1999-2011 and on the basis of exports and employment dynamics