Modeling insurgent-incumbent dynamics: Vector autoregressions,multivariate Markov chains, and the nature of technological competition

Bruno Damásio and Sandro Mendonça

No 2018/44, Working Papers REM from ISEG - Lisbon School of Economics and Management, REM, Universidade de Lisboa

Abstract: The struggle between sail and steam is a long-standing theme in economic history. But this technological competition story has only partly tackled, since most studies have appreciated the rivalry between the two alternative modes of commercial sea carriage in the late 19th century while the early period has remained relatively under-analysed. This paper models the early dynamics between the two capital goods using a vector autoregression approach (VAR) and a Multivariate Markov Chain approach (MMC). We find evidence that the relationship was nonlinear, with a strong indication of complementarities and cross-technology learning effects.

Keywords: economic history; technological competition; sailing ships; steamships; vector autoregression; multivariate Markov chain (search for similar items in EconPapers)
Date: 2018-07
New Economics Papers: this item is included in nep-his and nep-ino
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Persistent link: https://EconPapers.repec.org/RePEc:ise:remwps:wp0442018

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