Product variety and technical change

Richard Frensch () and Vitalija Gaucaite-Wittich

No 265, Working Papers from Leibniz Institut für Ost- und Südosteuropaforschung (Institute for East and Southeast European Studies)

Abstract: Several trade-based measures of product variety have recently been used implicitly to represent states of technology, promoting long-run growth. In this paper, we define the state of technology as the range of specialised production processes and propose the variety of capital goods available for production as a direct measure of technology. Within a simple growth framework, we derive a testable “conditional technological convergence” hypothesis on this measure. The hypothesis is tested with highly disaggregated trade data by economic categories, using tools from the income convergence literature. The results suggest that trade-based count measures of the variety of available capital goods indeed behave “as if” they were representing technology and that there is conditional technological convergence among our panel of mainly OECD and transition economies.

Keywords: Product variety; diffusion; adoption; technical change (search for similar items in EconPapers)
JEL-codes: F14 O33 (search for similar items in EconPapers)
Pages: 42
Date: 2006-11
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Citations: View citations in EconPapers (3)

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Journal Article: Product variety and technical change (2009)
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