The Intensive Margin of Technology Adoption

Diego Comin and Martí Mestieri

No 11-026, Harvard Business School Working Papers from Harvard Business School

Abstract: We present a tractable model for analyzing the relationship between economic growth and the intensive and extensive margins of technology adoption. The "extensive" margin refers to the timing of a country's adoption of a new technology; the "intensive" margin refers to how many units are adopted (for a given size economy). At the aggregate level, our model is isomorphic to a neoclassical growth model, while at the microeconomic level it features adoption of firms at the extensive and the intensive margin. Based on a data set of 15 technologies and 166 countries our estimations of the model yield four main findings: (i) there are large cross-country differences in the intensive margin of adoption; (ii) differences in the intensive margin vary substantially across technologies; (iii) the cross-country dispersion of adoption lags has declined over time while the cross-country dispersion in the intensive margin has not; (iv) the cross- country variation in the intensive margin of adoption accounts for more than 40% of the variation in income per capita.

Keywords: Economic Growth; Technology Adoption; Cross-country studies. (search for similar items in EconPapers)
JEL-codes: E13 O14 O33 O41 (search for similar items in EconPapers)
Pages: 45 pages
Date: 2010-09
New Economics Papers: this item is included in nep-mac
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Citations: View citations in EconPapers (8)

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