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Firm-Level Technology Adoption in Times of Crisis

Author

Listed:
  • Arntz, Melanie

    (ZEW Mannheim)

  • Böhm, Michael Johannes

    (TU Dortmund)

  • Graetz, Georg

    (Uppsala University)

  • Gregory, Terry

    (LISER)

  • Lehmer, Florian

    (Institute for Employment Research (IAB), Nuremberg)

  • Lipowski, Cäcilia

    (ZEW)

Abstract

We investigate the diffusion of frontier technologies across German firms before and during the Covid-19 crisis. Our analysis tracks the nature, timing, and pandemic-related motivations behind technology investments, using tailor-made longitudinal survey data linked to administrative worker--firm records. Technologies adopted after the onset of the pandemic increasingly facilitated remote work and mitigated the negative employment effects of the crisis. Overall, however, investments in frontier technologies declined sharply, equivalent to a loss of 1.4 years of pre-pandemic investment activity. This procyclical adoption pattern is particularly striking since the pandemic created clear incentives to experiment with new technologies. Our findings highlight how short-run fluctuations may influence medium-run economic growth through their impact on technology diffusion.

Suggested Citation

  • Arntz, Melanie & Böhm, Michael Johannes & Graetz, Georg & Gregory, Terry & Lehmer, Florian & Lipowski, Cäcilia, 2025. "Firm-Level Technology Adoption in Times of Crisis," IZA Discussion Papers 17846, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp17846
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    More about this item

    Keywords

    cyclicality of technology adoption; firm-level survey data; frontier technology investments; Covid-19 crisis;
    All these keywords.

    JEL classification:

    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand

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