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Internal And External Adjustment To New Technologies

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  • Lutz Bellmann
  • Tito Boeri

Abstract

Schumpeterian creative destruction occurs not only at the industry level, but also with each firm trying to maintain or improve its position in the technology race. Based on a rich data set on more than 4,000 German business units, this paper shows that the simultaneous occurrence of hiring and separations is more likely in firms with the most advanced technologies in use than in units more distant from the technological frontier. This positive relation between technological advance and creative destruction documented also by churning and 'excess job reallocation equations - holds particularly in recovery years, while it is weak during a recession. The explanation provided for this finding in the paper is that firms can also improve technologies by upgrading machinery and/or retraining workers, and these 'implementation' costs arc likely to be lower during economic downturns.

Suggested Citation

  • Lutz Bellmann & Tito Boeri, 1998. "Internal And External Adjustment To New Technologies," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 5(2-4), pages 325-343.
    • Handle: RePEc:taf:ecinnt:v:5:y:1998:i:2-4:p:325-343
    DOI: 10.1080/10438599800000010
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    References listed on IDEAS

    as
    1. Boeri, Tito & Cramer, Ulrich, 1992. "Employment growth, incumbents and entrants : Evidence from Germany," International Journal of Industrial Organization, Elsevier, vol. 10(4), pages 545-565, December.
    2. Philippe Aghion & Peter Howitt, 1994. "Growth and Unemployment," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 61(3), pages 477-494.
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    Citations

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    Cited by:

    1. Mark Doms & Eric J. Bartelsman, 2000. "Understanding Productivity: Lessons from Longitudinal Microdata," Journal of Economic Literature, American Economic Association, vol. 38(3), pages 569-594, September.
    2. Michael Mesch, 2007. "Die Berufsstruktur der Beschäftigung in Wien 1991-2001," Wirtschaft und Gesellschaft - WuG, Kammer für Arbeiter und Angestellte für Wien, Abteilung Wirtschaftswissenschaft und Statistik, vol. 33(1), pages 41-72.
    3. Pekka Ilmakunnas & Mika Maliranta, 2005. "Worker inflow, outflow, and churning," Applied Economics, Taylor & Francis Journals, vol. 37(10), pages 1115-1133.
    4. Boockmann, Bernhard & Hagen, Tobias, 2002. "Arbeitsplatzdynamik und befristete Verträge: Empirische Evidenz aus dem IAB-Betriebspanel für Baden-Württemberg (Job dynamics and fixed-term contracts : empirical evidence from the IAB establishment p," Mitteilungen aus der Arbeitsmarkt- und Berufsforschung, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 35(3), pages 385-396.
    5. Boockmann, Bernhard & Hagen, Tobias, 2002. "Arbeitsplatzdynamik und befristete Verträge: Empirische Evidenz aus dem IAB-Betriebspanel für Baden-Württemberg (Job dynamics and fixed-term contracts : empirical evidence from the IAB establishment p," Mitteilungen aus der Arbeitsmarkt- und Berufsforschung, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 35(3), pages 385-396.
    6. Alda, Holger & Allaart, Piet & Bellmann, Lutz, 2005. "Churning and institutions : Dutch and German establishments compared with micro-level data," IAB-Discussion Paper 200512, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].

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    More about this item

    Keywords

    Creative destruction; labour turnover; implementation costs. JEL classification codes: 03; L21; 363;
    All these keywords.

    JEL classification:

    • L21 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Business Objectives of the Firm

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