An Exploration of Technology Diffusion

50 Pages Posted: 14 Jul 2006 Last revised: 12 Jul 2012

See all articles by Diego Comin

Diego Comin

New York University (NYU) - Department of Economics; National Bureau of Economic Research (NBER)

Bart Hobijn

ASU

Date Written: June 2006

Abstract

We develop and estimate a model where technology diffusion depends on the level of productivity embodied in capital and where this is, in turn, determined by two key mechanisms: the rate at which the quality embodied in new technology vintages increases (embodiment) and the gains from varieties induced by the introduction of new vintages (variety). In our model, these two effects are related to technology adoption decisions taken at two different levels. The capital goods suppliers%u2019 decisions of when to adopt a given vintage determines the embodiment margin. The workers%u2019 decisions of which of the adopted vintages to use in production determines the variety margin.Estimation of our model for a sample of 19 technologies, 21 countries, and the period 1870-1998 reveals that embodied productivity growth is large for many of the technologies in our sample. On average, increases in the variety of vintages available is a more important source of growth than the increases in the embodiment margin. There is, however, substantial heterogeneity across technologies. Where adoption lags matter, they are largely determined by lack of educational attainment and lack of trade openness.

Suggested Citation

Comin, Diego and Hobijn, Bart, An Exploration of Technology Diffusion (June 2006). NBER Working Paper No. w12314. Available at SSRN: https://ssrn.com/abstract=910846

Diego Comin (Contact Author)

New York University (NYU) - Department of Economics ( email )

269 Mercer Street, 7th Floor
New York, NY 10011
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Bart Hobijn

ASU ( email )

501 E. Orange Street
Tempe, AZ 85287-9801
United States
(480)-965-0215 (Phone)

HOME PAGE: http://www.barthobijn.net

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