The Economic effects of information technology: firm level evidence from the Italian case

Employing a large data set of manufacturing firms the paper tries to assess the impact of information and communication technology (ICT) on productivity growth in Italy and to investigate the differences in ICT adoption between North and South of the country. Not all firms invest in ICT and skills, or better to say, not at the same rate. This situation is found to be at the base of the broad productivity variance across the sample. In Italy performance asymmetry has a strong territorial identity since in the North firms invest more in ICT and ICT complements relatively to the South which appears to be rather backwards. A standard regression methodology is employed to calculate the growth rate of productivity and the impact of ICT adoption on it. We then focus on the different matching between human capital and ICT adoption in the two areas. Our findings support the idea that using ICT has beneficial effects on overall productivity growth. Moreover, the use of ICT can help firms in the South to catch up relatively the northern ones, provided that they employ more skilled workers.