An Exploration of Technology Diffusion

Diego Comin and Bart Hobiijn
Authors registered in the RePEc Author Service: Bart Hobijn

No 12314, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We develop and estimate a model where technology diffusion depends on the level of productivity embodied in capital and where this is, in turn, determined by two key mechanisms: the rate at which the quality embodied in new technology vintages increases (embodiment) and the gains from varieties induced by the introduction of new vintages (variety). In our model, these two effects are related to technology adoption decisions taken at two different levels. The capital goods suppliers' decisions of when to adopt a given vintage determines the embodiment margin. The workers' decisions of which of the adopted vintages to use in production determines the variety margin. Estimation of our model for a sample of 19 technologies, 21 countries, and the period 1870-1998 reveals that embodied productivity growth is large for many of the technologies in our sample. On average, increases in the variety of vintages available is a more important source of growth than the increases in the embodiment margin. There is, however, substantial heterogeneity across technologies. Where adoption lags matter, they are largely determined by lack of educational attainment and lack of trade openness.

JEL-codes: E13 O14 O33 O41 (search for similar items in EconPapers)
Date: 2006-06
New Economics Papers: this item is included in nep-dev, nep-ino and nep-mac
Note: EFG PR
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

Published as Diego Comin & Bart Hobijn, 2010. "An Exploration of Technology Diffusion," American Economic Review, American Economic Association, vol. 100(5), pages 2031-59, December.

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Related works:
Journal Article: An Exploration of Technology Diffusion (2010)
Working Paper: An Exploration of Technology Diffusion (2008)
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