Factor-Augmenting Technical Change: An Empirical Assessment

33 Pages Posted: 29 Nov 2009

See all articles by Carlo Carraro

Carlo Carraro

Fondazione Eni Enrico Mattei (FEEM); Ca' Foscari University of Venice; CMCC - Euro Mediterranean Centre for Climate Change (Climate Policy Division); IPCC; Centre for Economic Policy Research (CEPR); CESifo (Center for Economic Studies and Ifo Institute); Centre for European Policy Studies, Brussels; Green Growth Knowledge Platform; International Center for Climate Governance

Enrica De Cian

Fondazione Eni Enrico Mattei (FEEM); CMCC - Centro Euro-Mediterraneo sui Cambiamenti Climatici

Date Written: November 25, 2009

Abstract

This paper estimates factor-specific technical change and input substitution using a structural approach. It improves upon the existing literature by introducing technology drivers for factor productivities and by assessing the impact of endogenous technical change on the estimates of substitution elasticities. The empirical results suggest that factor-productivities are indeed endogenous. In addition, technology drivers are factor-specific. Whereas R&D investments and machinery imports are important determinants of energy and capital productivity, education is found to be statistically related to labour productivity. The rate of energy-augmenting technical change is larger than that of either labour or capital. By contrast, the productivity of these two factors grows at similar rates. Estimates of the elasticities of substitution are within the ranges identified by previous literature. In addition, our results suggest that endogenous technical change lowers the estimated values of the substitution elasticity.

Keywords: Technical change, Technology spillovers, Endogenous growth, Panel regression

JEL Classification: C3, O47, Q55, Q56

Suggested Citation

Carraro, Carlo and De Cian, Enrica, Factor-Augmenting Technical Change: An Empirical Assessment (November 25, 2009). University Ca' Foscari of Venice, Dept. of Economics Research Paper Series No. 29_09. Available at SSRN: https://ssrn.com/abstract=1513295 or http://dx.doi.org/10.2139/ssrn.1513295

Carlo Carraro (Contact Author)

Fondazione Eni Enrico Mattei (FEEM) ( email )

Isola di San Giorgio Maggiore 8
Venezia, 30124
Italy
+39 04 12700460 (Phone)
+39 04 12700412 (Fax)

Ca' Foscari University of Venice ( email )

Cannaregio 873
Venice, 30121
Italy
+39 04 1234 9166 (Phone)
+39 04 1234 9176 (Fax)

HOME PAGE: http://www.carlocarraro.org/

CMCC - Euro Mediterranean Centre for Climate Change (Climate Policy Division) ( email )

Via Augusto Imperatore 16
Lecce, 73100
Italy
+39 0832 288650 (Phone)
+39 0832 277603 (Fax)

IPCC ( email )

C/O World Meteorological Organization
7bis Avenue de la Paix
Geneva, CH-1211
Switzerland
+41-22-730-8208/54/84 (Phone)
+41-22-730-8025/13 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Centre for European Policy Studies, Brussels

1 Place du Congres
B-1000 Brussels, 1000
Belgium
+32 2 229 3911 (Phone)
+32 2 219 4151 (Fax)

Green Growth Knowledge Platform ( email )

International Environment House
11-13 chemin des Anemones
Geneva, 1219
Switzerland

HOME PAGE: http://www.greengrowthknowledge.org/

International Center for Climate Governance ( email )

Island of San Giorgio Maggiore 8
Venice, I-30124
Italy

HOME PAGE: http://www.iccgov.org/

Enrica De Cian

Fondazione Eni Enrico Mattei (FEEM) ( email )

Campo S. M. Formosa, Castello 5252
Venice, 30122
Italy

CMCC - Centro Euro-Mediterraneo sui Cambiamenti Climatici ( email )

via Augusto Imperatore, 16
Lecce, I-73100
Italy

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
37
Abstract Views
594
PlumX Metrics