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Entry, Exit and Investment-Specific Technical Change

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Author Info
Roberto M. Samaniego () (Department of Economics, George Washington University)

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Abstract

Across industries, this paper finds that the rate of investment-specific technical change (ISTC) is positively related to rates of entry and exit. This finding is consistent with industry dynamics along the balanced growth path of a general equilibrium, multi-industry model of the plant lifecycle, in which technology adoption is costly and the rate of ISTC varies across industries. Results are robust to allowing for structural change induced by technological progress. The model also generates lumpy investment as a result of technology adoption by incumbents.

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Publisher Info
Paper provided by Penn Institute for Economic Research, Department of Economics, University of Pennsylvania in its series PIER Working Paper Archive with number 08-013.

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Length: 49 pages
Date of creation: 02 Apr 2008
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Handle: RePEc:pen:papers:08-013

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Related research
Keywords: Entry exit turnover investment-specific technical change entry costs vintage capital embodied technical change selection obsolescence structural change lumpy investment.

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Find related papers by JEL classification:
L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure
O33 - Economic Development, Technological Change, and Growth - - Technological Change - - - 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

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References listed on IDEAS
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.:
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Cited by:
(explanations, 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.)

  1. Anna Ilyina & Roberto M. Samaniego, 2008. "Technology and Finance," IMF Working Papers 08/182, International Monetary Fund. [Downloadable!]
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