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

Concetta Castiglione and Davide Infante ()

MPRA Paper from University Library of Munich, Germany

Abstract: This paper analyses the relationship between investment in Information and Communication Technologies (ICTs) and Technical Efficiency (TE). It uses a panel dataset of Italian manufacturing firms during the period 1995-2003. In contrast to much of the existing literature which focuses on the impact of ICT on labour or multifactor productivity, the paper analyses the relationship between ICT and TE using a stochastic frontier approach. Results show that ICT investment is positively associated with productivity and efficiency, but that the elasticities are lower than those associated with non-ICT capital and labour. Moreover, ICT investments have a positive effect on firm TE, and the impact of ICTs reduces firm inefficiency with a strong time lag since their adoption. Finally, the paper makes a methodological contribution by showing that a Cobb-Douglas production frontier is rejected in favour of a translog one.

Keywords: ICT; Stochastic Frontier; Technical Efficiency; Manufacturing Firms (search for similar items in EconPapers)
JEL-codes: D24 L25 L60 O33 (search for similar items in EconPapers)
Date: 2012-03-30
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https://mpra.ub.uni-muenchen.de/55466/9/MPRA_paper_55466.pdf revised version (application/pdf)

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