Technology spillover and regional convergence process: A statistical analysis of the Italian case

Recent literature broadly highlight the importance of modelling technological innovation effects on economic growth. This paper develops a methodology that allows to measure technology contribution to economic convergence; the choice of a regional framework also allows to underline interregional knowledge transmission as a the major channel of technological progress. Moreover, the specification of a dynamic growth model enables to evaluate both the regional convergence and the effect of innovation on long-run labour productivity without resorting to any technology index measurement.We contribute to the methodological literature also by comparing different dynamic panel data estimation procedures and by detecting both the presence of small sample bias and the existence of a nearly unit root autoregressive process in labour productivity series. The results of an empirical analysis on Italian regions show how most of innovation resources derives from relevant spillover mechanisms. Furthermore, technology spillover intensity seems to be strongly affected by geography and productive structure of regions. © Springer-Verlag 2004.