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Disrupting regional efficiency gaps via Industry 4.0 firm investments

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  • Antonio Fabio Forgione
  • Carlo Migliardo

Abstract

This paper has two principal purposes. The first is to measure the operational efficiency gain that adopting new advanced technologies, defined as the fourth industrial revolution allows firms to achieve. The second is to challenge whether Industry 4.0 investments bring about strong enough improvement in firm performance to address the historical regional development gaps in Italy. Using a sample of 2609 firms observed during the period 2016–2019, we estimate technical efficiency scores by applying a one–step stochastic frontier analysis. This technique allows us to simultaneously relate operating performance to a set of regional dummy variables and assess the Industry 4.0 investment share of total firm investment expenditure. The stylised facts indicate substantial efficiency disparities between smart factories and firms that do not implement such investments. The adoption of new technologies partially mitigates the Italian regional efficiency gap, bridging the distance between Southern Italy and the rest of Italy.

Suggested Citation

  • Antonio Fabio Forgione & Carlo Migliardo, 2023. "Disrupting regional efficiency gaps via Industry 4.0 firm investments," Industry and Innovation, Taylor & Francis Journals, vol. 30(1), pages 135-158, January.
    • Handle: RePEc:taf:indinn:v:30:y:2023:i:1:p:135-158
    DOI: 10.1080/13662716.2022.2063111
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    Cited by:

    1. Stan Metcalfe, 2024. "Joseph Schumpeter, Alfred Marshall and the nature of restless capitalism," MIOIR Working Paper Series 2024-02, The Manchester Institute of Innovation Research (MIoIR), The University of Manchester.
    2. Silvia Massini & Mabel Sanchez Barrioluengo & Xiaoxiao Yu & Reza Salehnejad, 2024. "Digital transformation in firms: determinants of technology adoption and implications for performance," MIOIR Working Paper Series 2024-01, The Manchester Institute of Innovation Research (MIoIR), The University of Manchester.

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