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Entry, Exit and Investment-Specific Technical Change

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  • Roberto M. Samaniego

    ()
    (Department of Economics, George Washington University)

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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Bibliographic 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
Date of revision:
Handle: RePEc:pen:papers:08-013

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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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References

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Citations

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Cited by:
  1. Roberto Samaniego & Anna Ilyina, 2009. "A Multi-industry Model of Growth with Financing Constraints," 2009 Meeting Papers, Society for Economic Dynamics 467, Society for Economic Dynamics.
  2. J. David Brown & Julie L. Hotchkiss & Myriam Quispe-Agnoli, 2012. "Does employing undocumented workers give firms a competitive advantage?," Working Paper, Federal Reserve Bank of Atlanta 2012-02, Federal Reserve Bank of Atlanta.
  3. Petrosky-Nadeau, Nicolas, 2013. "TFP during a credit crunch," Journal of Economic Theory, Elsevier, Elsevier, vol. 148(3), pages 1150-1178.
  4. Anna Ilyina & Roberto M. Samaniego, 2008. "Technology and Finance," IMF Working Papers, International Monetary Fund 08/182, International Monetary Fund.
  5. Camilo Mondragón-Vélez, 2009. "The probability of transition to entrepreneurship revisited: wealth, education and age," Annals of Finance, Springer, Springer, vol. 5(3), pages 421-441, June.
  6. Yu Sun, 2011. "Recent Developments in European Bank Competition," IMF Working Papers, International Monetary Fund 11/146, International Monetary Fund.
  7. Rui Castro & Gian Luca Clementi & Yoonsoo Lee, 2011. "Cross-Sectoral Variation in The Volatility of Plant-Level Idiosyncratic Shocks," NBER Working Papers 17659, National Bureau of Economic Research, Inc.
  8. Ilyina, Anna & Samaniego, Roberto, 2012. "Structural change and financing constraints," Journal of Monetary Economics, Elsevier, Elsevier, vol. 59(2), pages 166-179.
  9. Samaniego, Roberto M., 2013. "Knowledge spillovers and intellectual property rights," International Journal of Industrial Organization, Elsevier, Elsevier, vol. 31(1), pages 50-63.

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