The Intensive Margin of Technology Adoption

45 Pages Posted: 13 Sep 2010

See all articles by Diego A. Comin

Diego A. Comin

Harvard Business School - Business, Government and the International Economy Unit

Marti Mestieri

University of Toulouse 1 - Toulouse School of Economics (TSE)

Date Written: May 13, 2010

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

JEL Classification: E13, O14, O33, O41

Suggested Citation

Comin, Diego A. and Mestieri, Marti, The Intensive Margin of Technology Adoption (May 13, 2010). Harvard Business School BGIE Unit Working Paper No. 11-026, Available at SSRN: https://ssrn.com/abstract=1676302 or http://dx.doi.org/10.2139/ssrn.1676302

Diego A. Comin (Contact Author)

Harvard Business School - Business, Government and the International Economy Unit ( email )

Cambridge
United States

Marti Mestieri

University of Toulouse 1 - Toulouse School of Economics (TSE) ( email )

Place Anatole-France
Toulouse Cedex, F-31042
France

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