Regional Disparity in ICT Adoption: An Empirical Evaluation of the Effects of Subsidies in Italy

This paper investigates on a marked case of regional inequality concerning the information and communication technology adoption process and the role of subsidies in Italy. There is a consolidated and persistent gap between the industrialized North and the sensibly backward South. Econometric results show that adoption of ICT is affected by the geographical location, the industry and firm characteristics. A matching estimator is applied to explore subsidies effectiveness. We find that subsidies have a significant impact but only for small firms. Given the firm system in Italy, we conclude that, to limit the acceleration of Italian North-South dualism, subsidies should only be granted to small firms.