The Contribution of ICT to Production Efficiency in Italy

This paper examines the impact of information and communications technologies (ICTs) on technical production efficiency in a wide range of Italian industries. Technical efficiency, defined as the firm’s distance from the production efficiency frontier, is one important component of productivity. Assessing the role of ICTs in the organisation and control of production processes may be of primary interest for those firms that are trying to rationalise their production organisation and techniques. The survey of firms examined, the Italian ISTAT SCI covering all firms with at least 20 employees, offers an opportunity to test the hypothesis that ICTs, in both hardware and software components, can positively influence production performance. The analysis is carried out within industries defined by the OECD STAN database, to ease international comparability of the empirical results. Technical efficiency of each individual firm is measured by means of data envelopment analysis, a ...