Mind the Gap: Convergence of Technology and Technology of Convergence in Italian Regions, 1982-2001.

This paper presents a convergence analysis of labour productivity and total factor productivity across Italian regions. We check the robustness of the results by using an alternative measure of multi-factor productivity, and applying a test for the convergence hypothesis (as distinct by the mean reversion hypothesis). We interpreted the results against the backdrop of the structural change process have been occurring in the Italian economy for the late 1990s. Labour productivity doesn’t show evidence of convergence, while TFP does. Technology diffusion matters more than capital accumulation, and convergence at the aggregate level is driven by convergence in service sectors. We conclude that systematic reliance on innovation, public R&D expenditure, diffusion of ICTs, together with the rise of financial and communication sectors, seem to compose the mix that is leading to the convergence of technology