Author Abstract
We present a tractable model for analyzing the relationship between economic growth and the intensive and extensive margins of technology adoption. The "extensive" margin refers to the timing of a country's adoption of a new technology; the "intensive" margin refers to how many units are adopted (for a given size economy). At the aggregate level, our model is isomorphic to a neoclassical growth model, while at the microeconomic level it features adoption of firms at the extensive and the intensive margin. Based on a data set of 15 technologies and 166 countries our estimations of the model yield four main findings: (1) there are large cross-country differences in the intensive margin of adoption; (2) differences in the intensive margin vary substantially across technologies; (3) the cross-country dispersion of adoption lags has declined over time, while the cross-country dispersion in the intensive margin has not; and (4) the cross-country variation in the intensive margin of adoption accounts for more than 40% of the variation in income per capita.
Paper Information
- Full Working Paper Text
- Working Paper Publication Date: May, 2010
- HBS Working Paper Number: 11-026
- Faculty Unit(s): Business, Government and International Economy