International Openness, Technology and Productivity: An empirical Investigation for Italy

Is international openness associated with faster economic growth? This paper tries to establish the effect of technology and market opening on labour productivity in Italy. The simple model developed in this paper shows that more open economies have higher rate of technical progress, higher productivity and higher GDP. The model assumes that there are two sources of technical progress growth: a domestic source, associated with innovation (i.e. RD section three analyses the issue of the dualism of the Italian productive sectors; section four presents the model; section five examines the data and some estimates problems; section six presents the test of the model and the interpretation of the results and section seven presents some policy implications. * LUISS Guido Carli University, department of Economics In Italy, Scandizzo P.L., Milana C. (1991) the exposed sectors are Manufacturing; Chemicals and Pharmaceuticals; Food, Beverage and Tobacco;Wearing Apparel and Leather Industries; Textile; Other Manufacturing Industries; the protected sectors are Electricity, Construction, Transport, Storage and Communication, Other services, Government Services. Data are disaggregated in productive sectors according to the ISTAT (National Italian Statistic Institute) sectorial statistic. However within the sectors it is not possible to check the difference between exposed and protected sectors for the single firms.