Technology adoption during the process of development: Implications for long run prospects
Macroeconomic Dynamics, Forthcoming
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 non-frontier 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.
Keywords: R&D investment; technology adoption; growth and development; technology choice, convergence and polarization; transitional dynamics.
JEL: O30, O33, O40
Etiquetas: convergence and polarization, growth and development, R&D investment, technology adoption, technology choice, transitional dynamics