European Regional Convergence: Some Evidence for the Role of Information and Communication Technologies

In the last decades, the debate on convergence in Europe has captured the attention of academics and politicians. The issue that has received most attention is the ’supposed’ catching-up of European countries with respect to the United States after World War II. Usually, conditional and unconditional convergence was found mainly in the sixties and seventies and more weakly in the eighties and nineties. Enlarging the analysis to the world economy, convergence was found for some country groups (i.e. the OECD countries) but not for others. Recently two related issues have emerged in the research agenda. The first one concerns the renovated role that regions play in the growth process, together with the issue of regional disparities and convergence across- regions. The second one concerns the role of ICT and, more generally, of the knowledge economy, in fostering or hindering growth and regional disparities. On the first issue, our empirical analysis finds evidence of (absolute and conditional) convergence. We also find that both ICT diffusion and its rate of change positively affect steady state variables, whereas human capital seems to play a counterintuitive role. Though some caveats apply, ICT seem to play a role in determining regional steady states. This result should lead policy makers to adopt the right measures favouring the diffusion and adoption of ICT.