ICT and R&D as inputs or efficiency determinants? Analysing Italian manufacturing firms (2007–2009)

Are Information and Communication Technology (ICT) and Research & Development (R&D) productive inputs or efficiency determinants? This is the topic of this paper, which analyses a sample of 2691 Italian manufacturing firms over the period 2007-2009. Data are from a merged EFIGE-AIDA dataset. The empirical setting is based on a production function estimated through the stochastic frontier approach. ICT and R&D are used once as inputs, once as efficiency determinants. The results show that the elasticities of production with respect to ICT and R&D investments are quite high (0.08 for ICT and 0.04 for R&D) when they enter into the model only as inputs. We also documented that ICT and R&D contribute positively to explain the efficiency scores.