A panel technique for the analysis of technology convergence: The case of the Italian regions

Differences in productivity levels represent a major component of the large cross-country differences in per capita income observed in international datasets and even in some regional ones. Nowadays, few economists would dispute neither this finding, nor that differences in productivity reflects – among other things – differences in technology levels. More controversial is the question of whether such differences in technology are stationary or temporary – that is, whether technology convergence is taking place, at what speed, under what conditions. This state of affairs is the result of several different difficulties faced by the empirical analysis on cross-country differences in per capita income growth rates. Recently, things have improved on both the analytical and the empirical side. On the analytical side, simple models in which technology convergence and capital-deepening can be studied within a common framework are now available. In these models the transitional dynamics is simple enough to be useful for empirical analysis [for instance, De la Fuente (1996) and (1997)]. On the empirical side, Islam (1995) has shown that we can test for the presence of technology heterogeneity in cross-country convergence analysis by using an appropriate fixed-effect panel estimator. The contribution of the present paper is on the empirical side. We propose a method designed to test whether part of the observed economic convergence is due to technology convergence. The method is based on the contribution by Islam (1995), but it extends it as follows. Islam’s technique was originally designed – and is currently applied – to measure cross-country differences in technology levels, assuming that such (relative) differences are at their stationary values and therefore that no technology convergence is present. The extension proposed in this paper builds on the a standard implication of models of technology convergence. If such convergence is present, the cross-sectional variance of the logs of our measure of technology should decreases over time approaching its stationary value. Alternatively, if technology convergence is absent, the variance is at its stationary value and no significant time-trend should be detected in its value. We exploit this difference to test for the presence of technology convergence in the data. First, we estimate the convergence equation over several sub-periods and use the values of the individual intercepts to compute the TFP levels. Then, we obtain the cross-section variance of the logs of our measures of TFP for each sub-period, and check whether the observed pattern is consistent either with catching-up hypothesis or with the hypothesis that the current degree of technology heterogeneity is at its stationary value. In this paper we use a panel dataset of the Italian regions, 1960-95. We apply our proposed methodology to the Italian case because it is notoriously characterized by a remarkable degree of regional heterogeneity. In spite of being one of the best known cases of regional divide, no explicit analysis of technology convergence across Italian regions is available yet. We use dynamic panel techniques (LSDV and GMM) to estimates our growth regressions. We split the whole sample period in several sub-periods to check for the presence of technology convergence. Our preliminary results reveal a significant presence of technology convergence, which reached its peak between the first and the second sub-period, and stayed significant but at a slower pace in later sub-periods. The emerging picture points to the simultaneous presence of technology convergence in a context otherwise characterized by weak output per-worker convergence. This is consistent with some recent results based on international datasets (e.g. Dowrick and Rogers [OEP (2002]).

How to Measure the Unobservable: A Panel Technique for the Analysis of TFP Convergence

This paper proposes a fixed-effect panel methodology that enables us to simultaneously take into account both TFP convergence and the traditional neoclassical-type of convergence. We analyse a sample of Italian regions between 1963 and 1993 and find strong evidence that both mechanisms were at work during the process of aggregate regional convergence observed in Italy up to the mid-seventies. Finally, we find that our TFP estimates are highly positively correlated with standard human capital measures, where the latter is not statistically significant in growth regressions. This evidence confirms one of the hypotheses of the Nelson and Phelps approach, namely that human capital is the main determinant of technological catch-up. Our results are robust to the use of different estimation procedures such as simple LSDV, Kiviet-corrected LSDV, and GMM à la Arellano and Bond.TFP, Panel data, Regional convergence

Design of a New System of High-power Efficiency Conditioning Cogeneration Energy for a Building of the University of Cagliari with Fossil Fuel Plants

Abstract An analysis of Italy's National Energy Budget of in the last decades shows the important role of the civil sector and the impact of fossil fuels in air conditioning systems. The high consumption of fossil fuel is Likely due to the predominance of plants with conventional boilers in buildings. Based on the analysis of the Exergy flow this paper proposes the Cogeneration technology for Air conditioning systems with heat pumps to implement the Rational Use of Energy. The feasibility of a retrofit intervention on existing systems of a large size is shown, by the projection of a cogeneration plant for the buildings of the University of Cagliari currently equipped with fossil fuel plants

Solar Energy System in A Small Town Constituted of A Network of Photovoltaic Collectors to Produce Electricity for Homes and Hydrogen for Transport Services of Municipality

The supply of Energy resources to the villages located in inland and hilly regions, is disadvantageous both for the domestic and transport purposes. Because these conditions may produce the depopulation of the inland zone, a smart way to ease this inconvenience is to produce in situ electrical Energy for houses and fuel for cars, getting them from an available Energy source in the village, as the solar Energy. The only technology to produce hydrogen ecologically and to minimize CO2 emission, is through RES (Renewable Energy Sources). The solar energy plants must use the surfaces of buildings instead of occupying other green areas useful for agricultural activities. On this basis, we propose in this paper a demonstrative project for a village in Sardinia, consisting of photovoltaic collectors connected in a network, to provide electricity to homes and hydrogen for transport purposes

An Energy Autonomous House Equipped with a Solar PV Hydrogen Conversion System

The use of RES in buildings is difficult for their random nature; therefore the plants using photovoltaic solar collectors must be connected to a power supply or interconnected with Energy accumulators if the building is isolated. The conversion of electricity into hydrogen technology is best suited to solve the problem and allows you to transfer the solar energy captured from day to night, from summer to winter. This paper presents the feasibility study for a house powered by PV cogeneration solar collectors that reverse the electricity on the control unit that you command by a PC to power the household, using a heat pump, an electrolytic cell for the production of hydrogen to accumulate; control units sorting to the utilities the electricity produced by the fuel cell. The following are presented: The Energy analysis of the building, the plant design, economic analysi

How to measure the unobservable: a panel technique for the analysis of TFP convergence

This paper proposes a fixed-effect panel methodology that enables us to simultaneously take into account both TFP convergence and the traditional neoclassical-type of convergence. We analyse a sample of Italian regions between 1963 and 1993 and find strong evidence that both mechanisms were at work during the process of aggregate regional convergence observed in Italy up to the mid-seventies. Finally, we find that our TFP estimates are highly positively correlated with standard human capital measures, where the latter is not statistically significant in growth regressions. This evidence confirms one of the hypothesis of the Nelson and Phelps approach, namely that human capital is the main determinant of technological catch-up. Our results are robust to the use of different estimation procedures such as simple LSDV, Kiviet-corrected LSDV, and GMM à la Arellano and Bond

Three essays on ownership structure, firm performance and ability to invest

EThOS - Electronic Theses Online ServiceGBUnited Kingdo

When Paid Work Gives in to Unpaid Care Work: Evidence from the Hedge Fund Industry under COVID-19

We examine how childcare inequalities in the home affect the work productivity of female talent, using unique data on the family structures of hedge fund managers and the exogenous shock from school closures during the early COVID-19 pandemic response. We find that female managers’ ability to generate abnormal returns is curbed by 9% on average in the shock-month of school closures, providing a direct measure of the cost of unpaid care work. This effect is driven by mothers and especially mothers with young children. With increasing calls for more female representation in all layers of the economy and the efforts exerted toward that goal, there is reason for concern that these efforts might not factor in as the pandemic has uncovered how women in general and mothers in particular bear both the burden of unpaid care work and the subsequent cost to their paid work