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Matrix Exponential Stochastic Volatility with Cross Leverage

Author

Listed:
  • Tsuyoshi Nakamura

    (Department of Economics, Tokyo Keizai Univeristy)

  • Hiroshi Ohashi

    (Faculty of Economics, University of Tokyo)

Abstract

This paper examines the economic impact of re-invention - the degree to which an innovation is modified by user - on industry growth and productivity. The paper focuses on two re-inventions made by a Japanese steel company; these inventions improved the productive efficiency of Austrian-made refining technology, namely, basic oxygen furnace (BOF). Results obtained from the plant-level production-function estimation indicate that re-inventions account for approximately 30 percent of the total factor productivity of the BOF, substantially promoting the dissemination of the BOF technology. Our simulation analysis indeed reveals that re-inventions contributed to steel output growth by about 14 percent. This paper also documents that innovating companies played the role of a "lead user" in developing and disseminating their re-invented technologies.

Suggested Citation

  • Tsuyoshi Nakamura & Hiroshi Ohashi, 2011. "Matrix Exponential Stochastic Volatility with Cross Leverage," CIRJE F-Series CIRJE-F-813, CIRJE, Faculty of Economics, University of Tokyo.
    • Handle: RePEc:tky:fseres:2011cf813
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    File URL: http://www.cirje.e.u-tokyo.ac.jp/research/dp/2011/2011cf813.pdf
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    References listed on IDEAS

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