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Firm-Heterogeneous Biased Technological Change: A nonparametric approach under endogeneity

Ruben Dewitte, Michel Dumont, Bruno Merlevede (), Glenn Rayp and Marijn Verschelde ()

European Journal of Operational Research, 2020, vol. 283, issue 3, 1172-1182

Abstract: We propose a fully nonparametric framework to test to what extent technological change is factor-biased and heterogeneous. We show in a Monte Carlo simulation that our framework resolves the endogeneity issue between productivity and input choice and provides accurate estimates of firm-specific biases. For all Belgian manufacturing industries analyzed, we reject the predominant assumption of Hicks-neutral technological change over the period 1996–2015. We find that technological change is skill-biased, capital saving and domestic materials using. Moreover, we find significant heterogeneity in the pattern of technological change between and within industries. Relying on a rich dataset of firm characteristics, we provide robust indications that firm-level technological change can be attributed to specific firm strategies and technological characteristics.

Keywords: Productivity and competitiveness; Technological change; Firm heterogeneity; Nonparametric; Endogeneity (search for similar items in EconPapers)
Date: 2020
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Working Paper: Firm-Heterogeneous Biased Technological Change: A nonparametric approach under endogeneity (2020)
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DOI: 10.1016/j.ejor.2019.11.063

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