Firm-Level Technology Adoption in Times of Crisis

Melanie Arntz (), Michael Johannes Böhm (), Georg Graetz (), Terry Gregory (), Florian Lehmer () and Cäcilia Lipowski ()
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Melanie Arntz: ZEW Mannheim
Michael Johannes Böhm: TU Dortmund
Georg Graetz: Uppsala University
Terry Gregory: LISER
Florian Lehmer: Institute for Employment Research (IAB), Nuremberg
Cäcilia Lipowski: ZEW

No 17846, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We investigate the diffusion of frontier technologies across German firms before and during the Covid-19 crisis. Our analysis tracks the nature, timing, and pandemic-related motivations behind technology investments, using tailor-made longitudinal survey data linked to administrative worker--firm records. Technologies adopted after the onset of the pandemic increasingly facilitated remote work and mitigated the negative employment effects of the crisis. Overall, however, investments in frontier technologies declined sharply, equivalent to a loss of 1.4 years of pre-pandemic investment activity. This procyclical adoption pattern is particularly striking since the pandemic created clear incentives to experiment with new technologies. Our findings highlight how short-run fluctuations may influence medium-run economic growth through their impact on technology diffusion.

Keywords: cyclicality of technology adoption; firm-level survey data; frontier technology investments; Covid-19 crisis (search for similar items in EconPapers)
JEL-codes: E22 E32 J23 O33 (search for similar items in EconPapers)
Date: 2025-04
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