Neutral or Factor Saving Innovations?

11 Pages Posted: 14 Feb 2019

See all articles by Hernando Zuleta

Hernando Zuleta

Universidad de los Andes, Colombia

Andres Zambrano

Universidad de los Andes, Colombia

Date Written: December 11, 2018

Abstract

We present a theoretical argument to identify the conditions under which a firm prefers to invest in factor saving innovations rather than neutral innovations. We prove that incentives to invest in factor saving innovations positively depend on i) total factor productivity and ii) the scarcity of the factor.

Keywords: Factor Shares, Production Function, Productivity

JEL Classification: O11, O30, O41, O47, E01, E25

Suggested Citation

Zuleta, Hernando and Zambrano, Andres, Neutral or Factor Saving Innovations? (December 11, 2018). Documento CEDE No. 2018-65, Available at SSRN: https://ssrn.com/abstract=3334071 or http://dx.doi.org/10.2139/ssrn.3334071

Hernando Zuleta (Contact Author)

Universidad de los Andes, Colombia ( email )

Carrera Primera # 18A-12
Bogota, DC D.C. 110311
Colombia

Andres Zambrano

Universidad de los Andes, Colombia ( email )

Carrera Primera # 18A-12
Bogota, DC D.C. 110311
Colombia

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