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Induced innovation: an empirical test

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Author Info

  • Isabelle Armanville
  • Peter Funk

Abstract

A method is developed to empirically test the hypothesis of induced innovation as it has been specified and used in the theoretical literature. A strong and a weak version of the hypothesis is tested using sectorial data from the USA, Canada, Germany, France and the UK. The strong version tests for the exact dependency of the relation between the change in factor-productivities on the one hand and relative prices and actual factor-productivities on the other hand. The weak version only tests for the direction of this dependency. In all countries the weak hypothesis is accepted in all sectors except in 'electricity, gas, and water'. The strong hypothesis is accepted in about half of all sectors. It is rejected only in sectors, in which the degree to which progress is intentional is low.

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File URL: http://www.tandfonline.com/doi/abs/10.1080/0003684032000125051
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Bibliographic Info

Article provided by Taylor & Francis Journals in its journal Applied Economics.

Volume (Year): 35 (2003)
Issue (Month): 15 ()
Pages: 1627-1647

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Handle: RePEc:taf:applec:v:35:y:2003:i:15:p:1627-1647

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References

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  1. Romer, Paul M, 1990. "Endogenous Technological Change," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages S71-102, October.
  2. Funk, Peter, 2002. "Induced Innovation Revisited," Economica, London School of Economics and Political Science, vol. 69(273), pages 155-71, February.
  3. Dixon, R & McCombie, J, 1989. "Inter-industry Differences in the Factor-Augmenting Bias of Technological Change," Australian Economic Papers, Wiley Blackwell, vol. 28(52), pages 103-11, June.
  4. Binswanger, Hans P, 1974. "The Measurement of Technical Change Biases with Many Factors of Production," American Economic Review, American Economic Association, vol. 64(6), pages 964-76, December.
  5. Aghion, P. & Howitt, P., 1989. "A Model Of Growth Through Creative Destruction," Working papers 527, Massachusetts Institute of Technology (MIT), Department of Economics.
  6. Stavins, Robert & Jaffe, Adam & Newell, Richard, 1998. "The Induced Innovation Hypothesis and Energy-Saving Technological Change," Discussion Papers dp-98-12-rev, Resources For the Future.
  7. Daron Acemoglu, 2001. "Directed Technical Change," NBER Working Papers 8287, National Bureau of Economic Research, Inc.
  8. Michael T. Kiley, 1997. "The supply of skilled labor and skill-based technological progress," Finance and Economics Discussion Series 1997-45, Board of Governors of the Federal Reserve System (U.S.).
  9. Emmanuel M. Drandakis & Edmond S. Phelps, 1965. "A Model of Induced Invention, Growth and Distribution," Cowles Foundation Discussion Papers 186, Cowles Foundation for Research in Economics, Yale University.
  10. Stevenson, Rodney, 1980. "Measuring Technological Bias," American Economic Review, American Economic Association, vol. 70(1), pages 162-73, March.
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Citations

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Cited by:
  1. Shumway, C. Richard & Liu, Yucan, 2006. "Induced Innovation in the Agricultural Sector: Evidence From a State Panel," 2006 Annual meeting, July 23-26, Long Beach, CA 21089, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  2. Yucan Liu & C. Richard Shumway, 2009. "Induced Innovation in U.S. Agriculture: Time-series, Direct Econometric, and Nonparametric Tests," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 91(1), pages 224-236.
  3. Orachos Napasintuwong Artachinda, 2011. "Modeling Directions of Technical Change in Agricultural Sector," Working Papers 201101, Kasetsart University, Department of Agricultural and Resource Economics.
  4. Funk, Peter & Vogel, Thorsten, 2004. "Endogenous skill bias," Journal of Economic Dynamics and Control, Elsevier, vol. 28(11), pages 2155-2193, October.

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