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Demand-pull, technology-push, and the direction of technological change

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  • Kerstin Hotte

Abstract

This paper studies the impact of Demand-pull (DP) and Technology-push (TP) on growth, innovation, and the factor bias of technological change in a two-layer network of input-output (market) and patent citation (innovation) links among 307 6-digit US manufacturing industries in 1977-2012. Two types of TP and DP are distinguished: (1) DP and TP are between-layer spillovers when market demand shocks pull innovation and innovation pushes market growth. (2) Within-layer DP arises if downstream users trigger upstream innovation and growth, while TP effects spill over from up- to downstream industries. The results support between- and within-layer TP: Innovation spillovers from upstream industries drive market growth and innovation. Within the market, upstream supply shocks stimulate growth, but this effect differs across industries. DP is not supported but shows a factor bias favoring labor, while TP comes with a shift towards non-production work. The results are strongest after the 2000s and shed light on the drivers of recent technological change and its factor bias.

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  • Kerstin Hotte, 2021. "Demand-pull, technology-push, and the direction of technological change," Papers 2104.04813, arXiv.org, revised Jan 2023.
    • Handle: RePEc:arx:papers:2104.04813
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    Cited by:

    1. A. Fronzetti Colladon & B. Guardabascio & F. Venturini, 2023. "A new mapping of technological interdependence," Papers 2308.00014, arXiv.org, revised Mar 2024.

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