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Technology Adoption During The Process Of Development: Implications For Long-Run Prospects

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  • Mies, Verónica

Abstract

Most papers studying the impacts of technology adoption on income trajectories assume that firms adopt frontier technologies when available. If these technologies are skill intensive, less-developed economies may fail in successfully implementing them and may become trapped in a low-growth equilibrium. Within a Schumpeterian growth model, we show that differences in adoption barriers and incentives to the accumulation of skills produce differences in the technology level that is optimal to adopt. If the economy is not overly distorted, copying nonfrontier technologies helps compensating for the scarcity of skills and increases the likelihood of copying frontier technologies in the long run. If distortions are significant, it may be optimal to copy less-advanced technologies even in the long run. If adoption is not a skill-intensive activity, then copying frontier technologies is always optimal; all economies achieve a high-growth equilibrium and only income differences persist in the long run.

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  • Mies, Verónica, 2019. "Technology Adoption During The Process Of Development: Implications For Long-Run Prospects," Macroeconomic Dynamics, Cambridge University Press, vol. 23(3), pages 907-942, April.
    • Handle: RePEc:cup:macdyn:v:23:y:2019:i:03:p:907-942_00
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    Cited by:

    1. José De Gregorio, 2018. "Productivity in Emerging Market Economies: Slowdown or Stagnation?," Working Papers wp471, University of Chile, Department of Economics.
    2. Tanaka Masashi, 2020. "Changing demand for general skills, technological uncertainty, and economic growth," The B.E. Journal of Macroeconomics, De Gruyter, vol. 20(1), pages 1-25, January.

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