You might be interested in this broad answer on Italian economic stagnation in the Early Modern Period that I wrote about eight months ago.

You might also be interested in more specific discussions looking at the decline of Mercantile/Mariner Republics (or rather, their home cities), for which there's this answer which focuses mostly on Venice in the pre-industrial and industrial era with a brief comparison to Genoa, and this broader but more nuanced answer on the differing trajectories of Genoa and Venice in the Early Modern Period.

The short answer is that the Italian Wars of the early 16th century diverted resources and energy from more productive endeavors in a period when the rest of Europe was rapidly changing, which contributed (with other factors) to Italy not adapting to the economic and institutional innovations which emerged in Atlantic-facing Europe. In other words, Italian Republics didn't so much decline but remain stagnant, stuck in unchanging economic and political molds which had once been the most competitive in Europe, but were now eclipsed by new institutions and ideas emerging from the Atlantic part of the continent.