Regions, Institutions, and Resilience: Understanding the Factors of Economic Stability at the Regional Level: The Case of Italy?

Abstract

This paper investigates the structural and institutional determinants of regional economic resilience in Italy over the period 2005–2024. Drawing on the Autoregressive Distributed Lag (ARDL) model in a panel framework, the study assesses both the short- and long-term effects of institutional quality, public investment, human capital, unemployment, and sectoral diversification on regional GDP growth. The empirical results reveal a robust cointegrating relationship among these variables, with institutional quality, investment, and education exerting significant long-term impacts on regional economic performance. In contrast, unemployment emerges as the primary short-run constraint. The findings also confirm a moderate but significant speed of adjustment toward long-run equilibrium, highlighting Italy’s regional asymmetries in economic resilience. The study emphasizes the need for differentiated, multilevel, and temporally coordinated policies that promote both immediate stabilization and long-term structural transformation. It concludes with policy recommendations aimed at strengthening territorial cohesion and institutional capacity, particularly in structurally lagging regions.