The Intensive Margin of Technology Adoption
45 Pages Posted: 13 Sep 2010
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: Suggested Citation
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