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A Theory of Entry and Exit with Embodied Rate of Technical Change

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  • Roberto M Samaniego

    (Department of Economics George Washington University)

Abstract

The paper presents a vintage capital model that is consistent with the the relationship between the rate of embodied technical change and the rate of entry and exit across industries. In the model, the costs imposed by the regulation of entry may bias the sectoral composition of an economy towards industries in which the rate of technical change is low -- an effect termed technological skew. This prediction matches the empirical relationship between institutional entry costs and several indicators of sectoral composition across industrialized economies

Suggested Citation

  • Roberto M Samaniego, 2006. "A Theory of Entry and Exit with Embodied Rate of Technical Change," 2006 Meeting Papers 765, Society for Economic Dynamics.
    • Handle: RePEc:red:sed006:765
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    References listed on IDEAS

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    1. Boyan Jovanovic & Chung-Yi Tse, 2006. "Creative Destruction in Industries," NBER Working Papers 12520, National Bureau of Economic Research, Inc.

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    More about this item

    Keywords

    Entry; exit; embodied technical change; regulation of entry; sectoral composition; technological skew; information technology; services.;
    All these keywords.

    JEL classification:

    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • L63 - Industrial Organization - - Industry Studies: Manufacturing - - - Microelectronics; Computers; Communications Equipment
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy

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