IDEAS home Printed from https://ideas.repec.org/a/eee/respol/v46y2017i7p1340-1359.html
   My bibliography  Save this article

A multi-sector growth model with technology diffusion and networks

Author

Listed:
  • Magalhães, Manuela
  • Afonso, Óscar

Abstract

This paper adds the standard input–output linkages into a multi-sector endogenous growth model to study the interaction effects between linkages and technology adoption for aggregate productivity and for income per capita. We show that the greater the intensity with which a good is used as input by other sectors, the smaller are the technology adoption lags and the greater is the technology adoption intensity, and thus the greater are the increases of the Total Factor Productivity and of economic growth. Therefore, distinct input–output relationships between sectors explain inter-country income differences. By using OECD data, we then estimate the model for nine developed countries and ten technologies, and confirm our theoretical findings.

Suggested Citation

  • Magalhães, Manuela & Afonso, Óscar, 2017. "A multi-sector growth model with technology diffusion and networks," Research Policy, Elsevier, vol. 46(7), pages 1340-1359.
    • Handle: RePEc:eee:respol:v:46:y:2017:i:7:p:1340-1359
    DOI: 10.1016/j.respol.2017.05.004
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0048733317300793
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.respol.2017.05.004?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Caselli, Francesco, 2005. "Accounting for Cross-Country Income Differences," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 9, pages 679-741, Elsevier.
    2. Thomas Chaney, 2014. "The Network Structure of International Trade," American Economic Review, American Economic Association, vol. 104(11), pages 3600-3634, November.
    3. Susanto Basu & David N. Weil, 1998. "Appropriate Technology and Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 113(4), pages 1025-1054.
    4. Vasco M. Carvalho, 2014. "From Micro to Macro via Production Networks," Journal of Economic Perspectives, American Economic Association, vol. 28(4), pages 23-48, Fall.
    5. Greenwood, Jeremy & Yorukoglu, Mehmet, 1997. "1974," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 46(1), pages 49-95, June.
      • Greenwood, J. & Yorukoglu, M., 1996. "1974," RCER Working Papers 429, University of Rochester - Center for Economic Research (RCER).
    6. Fadinger, Harald & Ghiglino, Christian & Teteryatnikova, Mariya, 2015. "Income differences and input-output structure," Working Papers 15-11, University of Mannheim, Department of Economics.
    7. Vasco M. Carvalho, 2014. "From Micro to Macro via Production Networks," Working Papers 793, Barcelona School of Economics.
    8. Daron Acemoglu & Fabrizio Zilibotti, 2001. "Productivity Differences," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 116(2), pages 563-606.
    9. Ezra Oberfield, 2011. "Business networks, production chains and productivity: A theory of input-output architecture," Working Paper Series WP-2011-12, Federal Reserve Bank of Chicago.
    10. Aghion, Philippe & Howitt, Peter, 1992. "A Model of Growth through Creative Destruction," Econometrica, Econometric Society, vol. 60(2), pages 323-351, March.
    11. Caselli, Francesco, 2005. "Accounting for cross-country income differences," LSE Research Online Documents on Economics 5266, London School of Economics and Political Science, LSE Library.
    12. Diego Comin & Bart Hobijn, 2010. "An Exploration of Technology Diffusion," American Economic Review, American Economic Association, vol. 100(5), pages 2031-2059, December.
    13. Daron Acemoglu, 1998. "Why Do New Technologies Complement Skills? Directed Technical Change and Wage Inequality," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 113(4), pages 1055-1089.
    14. Daron Acemoglu, 2002. "Directed Technical Change," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 69(4), pages 781-809.
    15. Ciccone, Antonio & Matsuyama, Kiminori, 1996. "Start-up costs and pecuniary externalities as barriers to economic development," Journal of Development Economics, Elsevier, vol. 49(1), pages 33-59, April.
    16. Christopher Laincz & Pietro Peretto, 2006. "Scale effects in endogenous growth theory: an error of aggregation not specification," Journal of Economic Growth, Springer, vol. 11(3), pages 263-288, September.
    17. Francesco Caselli & James Feyrer, 2007. "The Marginal Product of Capital," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 122(2), pages 535-568.
    18. Diego Comin & Martí Mestieri, 2018. "If Technology Has Arrived Everywhere, Why Has Income Diverged?," American Economic Journal: Macroeconomics, American Economic Association, vol. 10(3), pages 137-178, July.
    19. Jakob Madsen, 2008. "Semi-endogenous versus Schumpeterian growth models: testing the knowledge production function using international data," Journal of Economic Growth, Springer, vol. 13(1), pages 1-26, March.
    20. Robert E. Hall & Charles I. Jones, 1999. "Why do Some Countries Produce So Much More Output Per Worker than Others?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 114(1), pages 83-116.
    21. Guan, JianCheng & Zuo, KaiRui & Chen, KaiHua & Yam, Richard C.M., 2016. "Does country-level R&D efficiency benefit from the collaboration network structure?," Research Policy, Elsevier, vol. 45(4), pages 770-784.
    22. Diego A. Comin & Bart Hobijn, 2009. "The CHAT Dataset," Harvard Business School Working Papers 10-035, Harvard Business School.
    23. Oscar Afonso, 2012. "Scale-independent North-South trade effects on the technological-knowledge bias and on wage inequality," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 148(1), pages 181-207, April.
    24. Bernard Herskovic & Bryan Kelly & Hanno Lustig & Stijn Van Nieuwerburgh, 2020. "Firm Volatility in Granular Networks," Journal of Political Economy, University of Chicago Press, vol. 128(11), pages 4097-4162.
    25. Daron Acemoglu & Pol Antràs & Elhanan Helpman, 2007. "Contracts and Technology Adoption," American Economic Review, American Economic Association, vol. 97(3), pages 916-943, June.
    26. Charles I. Jones, 2011. "Intermediate Goods and Weak Links in the Theory of Economic Development," American Economic Journal: Macroeconomics, American Economic Association, vol. 3(2), pages 1-28, April.
    27. repec:hal:spmain:info:hdl:2441/7an8r1ubqs93caeqs80puld0tp is not listed on IDEAS
    28. Dinopoulos, Elias & Thompson, Peter, 2000. "Endogenous growth in a cross-section of countries," Journal of International Economics, Elsevier, vol. 51(2), pages 335-362, August.
    29. Diego Comin & Bart Hobijn & Emilie Rovito, 2006. "Five Facts You Need to Know About Technology Diffusion," NBER Working Papers 11928, National Bureau of Economic Research, Inc.
    30. Daron Acemoglu & Vasco M. Carvalho & Asuman Ozdaglar & Alireza Tahbaz‐Salehi, 2012. "The Network Origins of Aggregate Fluctuations," Econometrica, Econometric Society, vol. 80(5), pages 1977-2016, September.
    31. Peretto, Pietro F, 1998. "Technological Change and Population Growth," Journal of Economic Growth, Springer, vol. 3(4), pages 283-311, December.
    32. Antonio Ciccone, 2002. "Input Chains and Industrialization," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 69(3), pages 565-587.
    33. Romer, Paul M, 1990. "Endogenous Technological Change," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 71-102, October.
    34. Ang, James B. & Madsen, Jakob B., 2015. "What Drives Ideas Production Across The World?," Macroeconomic Dynamics, Cambridge University Press, vol. 19(1), pages 79-115, January.
    35. Long, John B, Jr & Plosser, Charles I, 1983. "Real Business Cycles," Journal of Political Economy, University of Chicago Press, vol. 91(1), pages 39-69, February.
    36. Diego A. Comin & Martí Mestieri, 2010. "An Intensive Exploration of Technology Diffusion," NBER Working Papers 16379, National Bureau of Economic Research, Inc.
    37. Jerzmanowski, Michal, 2007. "Total factor productivity differences: Appropriate technology vs. efficiency," European Economic Review, Elsevier, vol. 51(8), pages 2080-2110, November.
    38. Caselli, Francesco, 2005. "Accounting for cross-country income differences," LSE Research Online Documents on Economics 3567, London School of Economics and Political Science, LSE Library.
    39. Hasan, Iftekhar & Tucci, Christopher L., 2010. "The innovation-economic growth nexus: Global evidence," Research Policy, Elsevier, vol. 39(10), pages 1264-1276, December.
    40. Parente, Stephen L & Prescott, Edward C, 1994. "Barriers to Technology Adoption and Development," Journal of Political Economy, University of Chicago Press, vol. 102(2), pages 298-321, April.
    41. Dominick Bartelme & Yuriy Gorodnichenko, 2015. "Linkages and Economic Development," NBER Working Papers 21251, National Bureau of Economic Research, Inc.
    42. Peter J. Klenow & Andrés Rodríguez-Clare, 1997. "The Neoclassical Revival in Growth Economics: Has It Gone Too Far?," NBER Chapters, in: NBER Macroeconomics Annual 1997, Volume 12, pages 73-114, National Bureau of Economic Research, Inc.
    43. Peter Howitt, 1999. "Steady Endogenous Growth with Population and R & D Inputs Growing," Journal of Political Economy, University of Chicago Press, vol. 107(4), pages 715-730, August.
    44. Bertolotti, Fabiola & Mattarelli, Elisa & Vignoli, Matteo & Macrì, Diego Maria, 2015. "Exploring the relationship between multiple team membership and team performance: The role of social networks and collaborative technology," Research Policy, Elsevier, vol. 44(4), pages 911-924.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Walheer, Barnabé, 2018. "Aggregation of metafrontier technology gap ratios: the case of European sectors in 1995–2015," European Journal of Operational Research, Elsevier, vol. 269(3), pages 1013-1026.
    2. Sequeira, Tiago Neves & Gil, Pedro Mazeda & Afonso, Oscar, 2018. "Endogenous growth and entropy," Journal of Economic Behavior & Organization, Elsevier, vol. 154(C), pages 100-120.
    3. Antonelli, Cristiano & Crespi, Francesco & Quatraro, Francesco, 2022. "Knowledge complexity and the mechanisms of knowledge generation and exploitation: The European evidence," Research Policy, Elsevier, vol. 51(8).
    4. Barnabé Walheer, 2019. "Scale, congestion, and technical efficiency of European countries: a sector-based nonparametric approach," Empirical Economics, Springer, vol. 56(6), pages 2025-2078, June.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Capolupo, Rosa, 2009. "The New Growth Theories and Their Empirics after Twenty Years," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 3, pages 1-72.
    2. Jerzmanowski, Michal & Tamura, Robert, 2019. "Directed technological change & cross-country income differences: A quantitative analysis," Journal of Development Economics, Elsevier, vol. 141(C).
    3. Jones, C.I., 2016. "The Facts of Economic Growth," Handbook of Macroeconomics, in: J. B. Taylor & Harald Uhlig (ed.), Handbook of Macroeconomics, edition 1, volume 2, chapter 0, pages 3-69, Elsevier.
    4. Charles D. Brummitt & Kenan Huremović & Paolo Pin & Matthew H. Bonds & Fernando Vega-Redondo, 2017. "Contagious disruptions and complexity traps in economic development," Nature Human Behaviour, Nature, vol. 1(9), pages 665-672, September.
    5. Francesco Caselli & Wilbur John Coleman II, 2006. "The World Technology Frontier," American Economic Review, American Economic Association, vol. 96(3), pages 499-522, June.
    6. Caselli, Francesco & Ciccone, Antonio, 2013. "The contribution of schooling in development accounting: Results from a nonparametric upper bound," Journal of Development Economics, Elsevier, vol. 104(C), pages 199-211.
    7. Charles I. Jones & Paul M. Romer, 2010. "The New Kaldor Facts: Ideas, Institutions, Population, and Human Capital," American Economic Journal: Macroeconomics, American Economic Association, vol. 2(1), pages 224-245, January.
    8. Harald Fadinger & Christian Ghiglino & Mariya Teteryatnikova, 2015. "Productivity, Networks and Input-Output Structure," 2015 Meeting Papers 624, Society for Economic Dynamics.
    9. Edwin Goni & William F. Maloney, 2014. "Why don’t Poor Countries do R&D?," Documentos CEDE 11947, Universidad de los Andes, Facultad de Economía, CEDE.
    10. Diego Restuccia & Richard Rogerson, 2013. "Misallocation and productivity," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 16(1), pages 1-10, January.
    11. Fadinger, Harald & Ghiglino, Christian & Teteryatnikova, Mariya, 2015. "Income differences and input-output structure," Working Papers 15-11, University of Mannheim, Department of Economics.
    12. Fadinger, Harald & Ghiglino, Christian & Teteryatnikova, Mariya, 2015. "Income differences and input-output structure," Working Papers 15-11, University of Mannheim, Department of Economics.
    13. Jerzmanowski, Michal, 2007. "Total factor productivity differences: Appropriate technology vs. efficiency," European Economic Review, Elsevier, vol. 51(8), pages 2080-2110, November.
    14. Ferraro, Domenico, 2017. "Volatility and slow technology diffusion," European Economic Review, Elsevier, vol. 96(C), pages 18-37.
    15. Goñi, Edwin & Maloney, William F., 2017. "Why don’t poor countries do R&D? Varying rates of factor returns across the development process," European Economic Review, Elsevier, vol. 94(C), pages 126-147.
    16. Lo Turco, Alessia & Maggioni, Daniela & Zazzaro, Alberto, 2019. "Financial dependence and growth: The role of input-output linkages," Journal of Economic Behavior & Organization, Elsevier, vol. 162(C), pages 308-328.
    17. Gancia, Gino & Zilibotti, Fabrizio, 2005. "Horizontal Innovation in the Theory of Growth and Development," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 3, pages 111-170, Elsevier.
    18. Levchenko, Andrei A. & Zhang, Jing, 2016. "The evolution of comparative advantage: Measurement and welfare implications," Journal of Monetary Economics, Elsevier, vol. 78(C), pages 96-111.
    19. Stephie Fried & David Lagakos, 2020. "Electricity and Firm Productivity: A General-Equilibrium Approach," NBER Working Papers 27081, National Bureau of Economic Research, Inc.
    20. Dominick Bartelme & Yuriy Gorodnichenko, 2015. "Linkages and Economic Development," NBER Working Papers 21251, National Bureau of Economic Research, Inc.

    More about this item

    Keywords

    O33; O41; O47; Income differences; Production network; Technology diffusion;
    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
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:respol:v:46:y:2017:i:7:p:1340-1359. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/respol .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.