Abstract
The aim of this work is to examine the long run relationship between total factor productivity (TFP) and energy consumption in Italy from 1996 to 2008 at a regional level. Differently from previous studies, TFP is employed as a measure of economic growth and therefore of technological change. Dynamic Panel estimation technique is used to investigate whether a connection between TFP and energy use exists and its direction. Results show a bidirectional causality for the Italian regions implying that those regions characterized by a higher TFP would invest more in research rather than in energy intensive activities, improving in that way the use of scarce resources and favoring a sustainable growth.
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