Vested Interests and Resistance to Technology Adoption
AbstractEmployed technologies differ vastly across countries. Within countries many technologies that would obviously improve firms’ efficiency are not adopted. This paper explains these observations by emphasizing that a new technology positively affects workers by lowering prices and increasing their real income, but also negatively by costs of getting acquainted with the new technology. If the costs of adoption for workers exceed the benefits, they will aim at keeping the old technology in place. We formalise the trade-off in a simple OLG model with majority voting. Age groups that lose from adopting resist. Successful resistance blocks adoption and hence lowers growth. Finally, we analyse the effects of tougher competition. Provided that consumption and leisure are relatively good substitutes, tougher competition mitigates resistance and thus favours economic growth as it increases the share of the rent associated with the new technology that is being captured by the workers.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Tilburg University, Center for Economic Research in its series Discussion Paper with number 1999-106.
Date of creation: 1999
Date of revision:
Contact details of provider:
Web page: http://center.uvt.nl
technological change; resistance; vested interests; overlapping generations; competition;
Find related papers by JEL classification:
- O14 - Economic Development, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
- O33 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
- O41 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
This paper has been announced in the following NEP Reports:
- NEP-ALL-1999-12-01 (All new papers)
- NEP-DEV-1999-12-01 (Development)
- NEP-INO-1999-12-01 (Innovation)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Antonelli, Cristiano, 2003. "Localized Technological Change," Department of Economics and Statistics Cognetti de Martiis LEI & BRICK - Laboratory of Economics of Innovation "Franco Momigliano", Bureau of Research in Innovation, Complexity and Knowledge, Collegio 200305, University of Turin.
- Edward C. Prescott, 1997.
"Needed: a theory of total factor productivity,"
242, Federal Reserve Bank of Minneapolis.
- Dixit, Avinash K & Stiglitz, Joseph E, 1975.
"Monopolistic Competition and Optimum Product Diversity,"
The Warwick Economics Research Paper Series (TWERPS)
64, University of Warwick, Department of Economics.
- Dixit, Avinash K & Stiglitz, Joseph E, 1977. "Monopolistic Competition and Optimum Product Diversity," American Economic Review, American Economic Association, vol. 67(3), pages 297-308, June.
- Elhanan Helpman & Antonio Rangel, 1998.
"Adjusting to a New Technology: Experience and Training,"
NBER Working Papers
6551, National Bureau of Economic Research, Inc.
- Helpman, Elhanan & Rangel, Antonio, 1999. " Adjusting to a New Technology: Experience and Training," Journal of Economic Growth, Springer, vol. 4(4), pages 359-83, December.
- Helpman, E. & Rangel, A., 1998. "Adjusting to a New Technology: Experience and Training," Papers 07-98, Tel Aviv.
- Elhanan Helpman & Antonio Rangel, 1998. "Adjusting to a New Technology: Experience and Training," Harvard Institute of Economic Research Working Papers 1833, Harvard - Institute of Economic Research.
- Elhanan Helpman & Antonio Rangel, 1998. "Adjusting to a New Technology: Experience and Training," Working Papers 99002, Stanford University, Department of Economics.
- Helpman, Elhanan & Rangel, Antonio, 1998. "Adjusting to a New Technology: Experience and Training," CEPR Discussion Papers 1930, C.E.P.R. Discussion Papers.
- Stephen L. Parente, 1995.
"A model of technology adoption and growth,"
Springer, vol. 6(3), pages 405-420.
- van de Klundert, Theo & Smulders, Sjak, 1997. " Growth, Competition and Welfare," Scandinavian Journal of Economics, Wiley Blackwell, vol. 99(1), pages 99-118, March.
- Jaffe, Adam B. & Stavins, Robert N., 1994. "The energy paradox and the diffusion of conservation technology," Resource and Energy Economics, Elsevier, vol. 16(2), pages 91-122, May.
- Bénassy, Jean-Pascal, 1996.
"Is there always too little research in endogenous growth with expanding product variety ?,"
CEPREMAP Working Papers (Couverture Orange)
- Benassy, Jean-Pascal, 1998. "Is there always too little research in endogenous growth with expanding product variety?," European Economic Review, Elsevier, vol. 42(1), pages 61-69, January.
- Krusell, Per & Rios-Rull, Jose-Victor, 1996.
"Vested Interests in a Positive Theory of Stagnation and Growth,"
Review of Economic Studies,
Wiley Blackwell, vol. 63(2), pages 301-29, April.
- Krusell, P. & Rios-Rull, J.V., 1993. "Vested Interests in a Positive Theory of Stagnation and Growth," Papers 547, Stockholm - International Economic Studies.
- de Groot, Henri L. F. & Nahuis, Richard, 1998. "Taste for diversity and the optimality of economic growth," Economics Letters, Elsevier, vol. 58(3), pages 291-295, March.
- Jovanovic, B. & Nyarko, Y., 1996.
"Learning by Doing and the Choice of Technology,"
96-25, C.V. Starr Center for Applied Economics, New York University.
- Boyan Jovanovic, 1995. "Learning and Growth," NBER Working Papers 5383, National Bureau of Economic Research, Inc.
- Susanto Basu & David N. Weil, 1996.
"Appropriate Technology and Growth,"
NBER Working Papers
5865, National Bureau of Economic Research, Inc.
- 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.
- Atkinson, Anthony B & Stiglitz, Joseph E, 1969. "A New View of Technological Change," Economic Journal, Royal Economic Society, vol. 79(315), pages 573-78, September.
- Chari, V V & Hopenhayn, Hugo, 1991. "Vintage Human Capital, Growth, and the Diffusion of New Technology," Journal of Political Economy, University of Chicago Press, vol. 99(6), pages 1142-65, December.
- Francesco Caselli, 1999. "Technological Revolutions," American Economic Review, American Economic Association, vol. 89(1), pages 78-102, March.
- Philippe Aghion & Peter Howitt, 1998. "Market Structure and the Growth Process," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 1(1), pages 276-305, January.
- Ronald J. Sutherland, 1991. "Market Barriers to Energy-Efficiency Investments," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3), pages 15-34.
- Howarth, Richard B. & Andersson, Bo, 1993. "Market barriers to energy efficiency," Energy Economics, Elsevier, vol. 15(4), pages 262-272, October.
- Canton, Erik J. F. & de Groot, Henri L. F. & Nahuis, Richard, 2002. "Vested interests, population ageing and technology adoption," European Journal of Political Economy, Elsevier, vol. 18(4), pages 631-652, November.
- Rehme, Günther, 2004.
"Redistribution and Economic Growth in Integrated Economies,"
Darmstadt Discussion Papers in Economics
21580, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute of Economics (VWL).
- Rehme, Gunther, 2006. "Redistribution and economic growth in integrated economies," Journal of Macroeconomics, Elsevier, vol. 28(2), pages 392-408, June.
- Gamal Atallah, 2009. "A Three-Period Analysis of R&D Spillovers in the Presence of an Industry Life Cycle Pattern," International Journal of Business and Economics, College of Business, and College of Finance, Feng Chia University, Taichung, Taiwan, vol. 8(1), pages 21-35, April.
- Rehme, Günther, 2007. "Endogenous (Re-)Distributive Policies and Economic Growth: A Comparative Static Analysis," Darmstadt Discussion Papers in Economics 35714, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute of Economics (VWL).
- Henri de Groot, 2001. "On the optimal timing of reductions of CO2 emissions; an economists' perspective on the debate on "when flexibility"," CPB Discussion Paper 1, CPB Netherlands Bureau for Economic Policy Analysis.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Richard Broekman).
If references are entirely missing, you can add them using this form.