Keep up with the modern joneses: an empirical analysis of the digital divide in Italy

Abstract

ABSTRACTThe advent of digitalization and digital culture has increased productivity in modern societies. However, the uneven distribution of both phenomena may exacerbate disparities between wealthier and poorer realities, inducing the poor to become the most impoverished and slowing down the catch-up process towards a more prosperous status. In this context, this article explores the relationship between digitalization, digital culture and growth of northern and southern Italian regions in the last twelve years. An empirical analysis is conducted with panel data aggregated at regional level (NUTS-2) and the system of Generalized Method of Moments (system-GMM). Evidence suggests a statistically significant relationship between digitalization, digital skills and local growth. Italy’s southern area is still affected by a low level of digital culture that slows down its development. Policymakers should formulate strategies to tackle this digital divide challenge to prevent the unequal distribution of resources between the two areas of the country, ensuring southern regions keep up with the northern Joneses in the long run.