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ICT Investments and Technical Efficiency in Italian Manufacturing Firms: The Productivity Paradox Revisited


  • Concetta Castiglione

    () (Department of Economics, Trinity College Dublin)


From the Seventies the importance of information and communication technologies (ICTs) has been a much debated question. A lot of studies are made in order to understand if the ICTs are able to increase economic growth, firm productivity and firm efficiency. In this study both the translog and the Cobb-Douglas production function are used in order to estimate the impact of information and communication technology on technical efficiency (TE) in the Italian manufacturing firms over the period 1995-2003. Results show that ICT investments positively and significantly affect firm technical efficiency. Moreover, group, size and geographical position are able to influence positively TE. Finally, results show that older firms are in average more efficient than younger ones.

Suggested Citation

  • Concetta Castiglione, 2008. "ICT Investments and Technical Efficiency in Italian Manufacturing Firms: The Productivity Paradox Revisited," Trinity Economics Papers tep0408, Trinity College Dublin, Department of Economics.
  • Handle: RePEc:tcd:tcduee:tep0408

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    ICT investment; Productivity Paradox; Stochastic Frontier; Italian manufacturing firms;

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • L63 - Industrial Organization - - Industry Studies: Manufacturing - - - Microelectronics; Computers; Communications Equipment
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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