The Role of Technological and Industrial Heterogeneity In Technology Diffusion: a Markovian Approach

Adela Luque

Working Papers from U.S. Census Bureau, Center for Economic Studies

Abstract: Recent empirical studies have established the importance of intra and inter-industry heterogeneity in investment in innovation and other outcomes. This paper examines the role of industry and technology heterogeneity in the diffusion of advanced manufacturing technologies from a simple Markovian approach. Using the Maximum Entropy estimator, I estimate transition probabilities and corresponding half-lives, look for outliers in technology and industry diffusion patterns, and try to find explanations of their unusual behavior in idiosyncratic technology and industry characteristics. A consistent industry-level pattern that emerged is one that relates consumer demand and production processes. It seems that in industries where hand-made products are a sign of quality to the customer, technology spreads very slowly. On the other hand, in industries where demand for sophisticated, high-precision goods is high or in industries where demand-driven product specifications vary quite rapidly over relatively short periods of time, advanced technologies diffuse much more rapidly.

Keywords: CES; economic; research; micro; data; microdata; chief; economist (search for similar items in EconPapers)
Date: 2003-02
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Persistent link: https://EconPapers.repec.org/RePEc:cen:wpaper:03-07

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