The impact of information and communication technologies: an insight at micro-level on one Italian region

It has been debated as to whether European countries and Italy itself have yet shared in the US productivity growth driven by the information and communication technology (ICT) revolution. This paper investigates the extent of ICT diffusion in manufacturing firms from an Italian region and its effect on performance at a micro-level from 2002 to 2008. It contributes to previous findings from three perspectives. First, it investigates the causal link between ICT adoption and productivity; second, it considers the distributional effect of ICT by measuring its impact on firms with different levels of efficiency and productivity; and third, it takes into account the important distinction between productive ICT embedded in machinery and capital equipment and integrating ICT acquired as licenses or know-how as external disembodied technology, with the basic purpose being to identify the channels through which ICT may work for different types of firms. The main findings are that (i) a wide dissemination of ICT is not exploited to its full potential; (ii) the ICT adoption has produced higher growth in technical efficiency for adopter firms than for the non-adopter firms, but slower growth in productivity, so supporting the productive paradox at the firm level; and (iii) different types of ICTs have had opposite impact among adopter firms – the adoption of ICTs as productive embodied technologies has accelerated the performance growth of firms with lower growth rates, while the adoption of ICTs of organisational type has increased their delay in efficiency and productivity with respect to the firms with higher growth rates.