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Factor-Augmenting Technical Change: An Empirical Assessment

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  • Enrica De Cian

    (Fondazione Eni Enrico Mattei and School of Advanced Studies in Venice)

Abstract

Starting from a system of factor demands, an empirical model that allows estimating factor-augmenting technical change is derived. Factor-augmenting technical change is defined as the improvement in factor productivities that can occur either exogenously or endogenously, with changes in other macroeconomic variables. This paper provides additional estimates for the substitution possibilities among inputs and it offers new empirical evidence on the direction and sources of factor-augmenting technical change, an issue that has not yet been explored by the empirical literature on growth determinants. The empirical findings suggest that technical change is directed. Technical change tends to be more energy-saving than capital- and labour-saving. Both R&D investments and international trade are important determinants of growth in energy and capital productivity whereas technical change for labour is positively related to education expenditure. Therefore, the sources of factor-augmenting technical change go beyond R&D investments, as proposed in the theory of directed technical change, and they differ across inputs. In other words, not only is technical change directed, the sources of factor-augmenting technical change appear to be input specific.

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Bibliographic Info

Paper provided by Fondazione Eni Enrico Mattei in its series Working Papers with number 2009.18.

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Date of creation: Mar 2009
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Handle: RePEc:fem:femwpa:2009.18

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Keywords: Factor-Augmenting Technical Change; Technology Spillovers; Panel Data;

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Citations

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Cited by:
  1. Carlo Carraro & Enrica De Cian & Massimo Tavoni, 2009. "Human Capital Formation and Global Warming Mitigation: Evidence from an Integrated Assessment Model," CESifo Working Paper Series 2874, CESifo Group Munich.
  2. Enrica De Cian & Carlo Carraro & Lea Nicita, 2010. "Modeling Biased Technical Change. Implications for Climate Policy," Working Papers 2010.4, Fondazione Eni Enrico Mattei.
  3. Michael Hübler & Alexander Glas, 2014. "The Energy-Bias of North–South Technology Spillovers: A Global, Bilateral, Bisectoral Trade Analysis," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 58(1), pages 59-89, May.
  4. Gnidchenko, Andrey, 2011. "Моделирование Технологических И Институциональных Эффектов В Макроэкономическом Прогнозировании
    [Technologica
    ," MPRA Paper 35484, University Library of Munich, Germany, revised May 2011.
  5. Enrica De Cian & Ramiro Parrado, 2012. "Technology Spillovers Embodied in International Trade: Intertemporal, regional and sectoral effects in a global CGE," Working Papers 2012.27, Fondazione Eni Enrico Mattei.

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