ICTs and lags in technical efficiency gains. A stochastic frontier approach over a panel of Italian manufacturing firms
AbstractThis 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.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 51071.
Date of creation: 30 Mar 2012
Date of revision:
ICT; Stochastic Frontier; Technical Efficiency; Manufacturing Firms;
Find related papers by JEL classification:
- D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
- L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
- L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
- O33 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
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