ICTs and time-span in technical efficiency gains. A stochastic frontier approach over a panel of Italian manufacturing firms

Castiglione, Concetta and Infante, Davide (2012): ICTs and time-span in technical efficiency gains. A stochastic frontier approach over a panel of Italian manufacturing firms. Forthcoming in: Economic Modelling No. Forthcoming

Abstract

This paper, in contrast to much of the existing literature, which focuses on the impact of Information and Communication Technologies (ICT) on labour productivity, assesses the relationship between ICTs investments and Technical Efficiency (TE) using a stochastic frontier approach. We use a large panel dataset of Italian manufacturing firms over the period 1995-2006 and confirm prior findings of the existing literature on ICT and productivity. In addition, we test on which extend the ICT investments influence the distance of the firm from the production frontier; that is, how ICT’s adoption influences the closing of the firm efficiency gap. We also test how long the effects of ICT investments on technical efficiency last. We find that ICT returns on TE are influenced by some firm’s characteristics, most of them idiosyncratic, such as management practices, labour organization, research and development.

• Item Type: MPRA Paper
• Language: English
• Keywords: ICT; stochastic frontier; technical efficiency; manufacturing firms
• Subjects: D - Microeconomics > D2 - Production and Organizations > D24 - Production ; Cost ; Capital ; Capital, Total Factor, and Multifactor Productivity ; Capacity; L - Industrial Organization > L2 - Firm Objectives, Organization, and Behavior > L25 - Firm Performance: Size, Diversification, and Scope; L - Industrial Organization > L6 - Industry Studies: Manufacturing > L63 - Microelectronics ; Computers ; Communications Equipment; O - Economic Development, Innovation, Technological Change, and Growth > O3 - Innovation ; Research and Development ; Technological Change ; Intellectual Property Rights > O33 - Technological Change: Choices and Consequences ; Diffusion Processes

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