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The dynamics of technological congruence

Author

Listed:
  • Cristiano Antonelli

    (Collegio Carlo Alberto, Università Di Torino and BRICK (Bureau of Research in Innovation Complexity and Knowledge))

  • Christophe Feder

    (Dipartimento Di Scienze Economiche E Politiche, Università Della Valle d’Aosta
    BRICK (Bureau of Research in Innovation Complexity and Knowledge))

Abstract

Technological congruence examines the alignment between output elasticity and relative input costs and its effects on the contingent efficiency of new technologies. The introduction of biased technological change is driven by the relative levels of input costs. In capital-abundant countries, the adoption of new capital-intensive (labor-intensive) technologies leads to an increase in output with a corresponding rise in the output elasticity of capital (labor). This paper explores the endogenous determinants and effects of technological congruence dynamics. Growth raises wages and reduces capital costs, creating a Schumpeterian loop where the new wage-to-capital cost ratio induces new directed technological changes to boost productivity. An empirical analysis using Penn World Table (PWT) data for 136 countries from 1991 to 2019 supports these findings. The policy implications stress the role and hence the need to control the bias of technological innovations to foster growth. The alignment of factor costs is crucial for effective technology transfer and global competitiveness. Since the efficiency of new technologies depends on factor costs, international technology transfer has positive effects only if and when technological congruence increases.

Suggested Citation

  • Cristiano Antonelli & Christophe Feder, 2025. "The dynamics of technological congruence," The Journal of Technology Transfer, Springer, vol. 50(3), pages 779-796, June.
    • Handle: RePEc:kap:jtecht:v:50:y:2025:i:3:d:10.1007_s10961-024-10156-9
    DOI: 10.1007/s10961-024-10156-9
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    Keywords

    Induced technological change; Factor costs levels versus changes; Biased total factor productivity; Endogenous factor costs; Schumpeterian loop; International technology transfer;
    All these keywords.

    JEL classification:

    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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