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The Effects of New Technology on Productivity: Technological Improvement and Reallocation Efficiency in the Japanese Steelmaking Industry

Author

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  • Ryuki Kobayashi

    (Graduate School of Economics, Keio University)

Abstract

This paper analyzes the effect of new technology for steel refining - the basic oxygen furnace (BOF)- on productivity growth using the productivity decomposition method. I employ a technique that decomposes productivity growth into four factors: operational improvement, within- and between-technology reallocation, and entry-exit effects. I demonstrate that the following two factors were equally important: (i) the rapid operational progress of new technology and (ii) between-technology reallocation both among existing furnaces and through entries (new construction). I also find that although the overall allocation efficiency improved, the within-BOF allocation efficiency declined. The results suggest that productivity growth followed the spread of BOF with rapid technological advancement while sacrificing allocative efficiency within the BOF furnaces.

Suggested Citation

  • Ryuki Kobayashi, 2022. "The Effects of New Technology on Productivity: Technological Improvement and Reallocation Efficiency in the Japanese Steelmaking Industry," Keio-IES Discussion Paper Series 2022-002, Institute for Economics Studies, Keio University.
    • Handle: RePEc:keo:dpaper:2022-002
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    More about this item

    Keywords

    Productivity; Productivity decomposition; Between-technology reallocation; Technology; Steelindustry;
    All these keywords.

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • L61 - Industrial Organization - - Industry Studies: Manufacturing - - - Metals and Metal Products; Cement; Glass; Ceramics
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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