Missing an opportunity: the Italian Mezzogiorno's trading troubles during European integration

Abstract

Among the many troubles that southern Italy's economy is facing, its deficient trade performance receives little attention. Yet the Mezzogiorno's comparative disadvantage in trade is a recurring theme in the long history of Italian inter-regional disparities. Adverse conditions for firms in tradeables persist while European integration opens up new opportunities for this sector to expand. In this paper, a dataset of employment rates in tradeable and non-tradeable sectors from 2000 to 2010 is constructed to analyse the strength and development of the Mezzogiorno's export base during European integration. The analysis shows that the new trade opportunities alone did not suffice to even the Mezzogiorno regions' road to export orientation.