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Effects of re-invention on industry growth and productivity: evidence from steel refining technology in Japan, 1957--1968

Tsuyoshi Nakamura and Hiroshi Ohashi ()

Economics of Innovation and New Technology, 2012, vol. 21, issue 4, 411-426

Abstract: This paper examines the economic impact of re-invention -- the degree to which an innovation is modified by user -- on industry growth and productivity. The paper focuses on two re-inventions made by a Japanese steel company; these inventions improved the productive efficiency of Austrian-made refining technology, namely basic oxygen furnace (BOF). Results obtained from the plant-level production function estimation indicate that re-inventions account for approximately 30% of the total factor productivity of the BOF, substantially promoting the dissemination of the BOF technology. Our simulation analysis indeed reveals that re-inventions contributed to steel output growth by about 14%. This paper also documents that innovating companies played the role of a ‘lead user’ in developing and disseminating their re-invented technologies.

Date: 2012
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DOI: 10.1080/10438599.2011.602538

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