Description:
<jats:sec><jats:title content-type="abstract-subheading">Purpose</jats:title><jats:p>This paper aims to provide an analysis of the productivity evolution of a sample of 18,459 knowledge-intensive business services (KIBS) firms operating in Italy over the period 2012–2018. The interaction between productivity heterogeneity firm localization and firm sector of business are also analyzed.</jats:p></jats:sec><jats:sec><jats:title content-type="abstract-subheading">Design/methodology/approach</jats:title><jats:p>The empirical setting is based on data envelopment analysis (DEA) to measure the multifactor productivity index (MPI) and on the multilevel models to investigate if the source of productivity heterogeneity among the Italian KIBS are due to the geographic location and/or to the specific business sectors in which firms operate. Data have been gathered from the AIDA database, which contains financial data of all Italian firms.</jats:p></jats:sec><jats:sec><jats:title content-type="abstract-subheading">Findings</jats:title><jats:p>The empirical results show that MPI heterogeneity in the Italian KIBS firms' is sensitive to the regional context in which firms operate to the specific KIBS sector and above all at the interactions arising between region and sector.</jats:p></jats:sec><jats:sec><jats:title content-type="abstract-subheading">Originality/value</jats:title><jats:p>The paper contributes to identify the source of productivity dispersion in the Italian KIBS.</jats:p></jats:sec>