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Technology diffusion and uneven development

Author

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  • Klemen Knez

    (University of Ljubljana, Faculty of Social Sciences
    European Commission)

Abstract

We propose a conceptualisation of the process of technology adoption that takes into account the uneven relative costs of technology implementation, especially country differences in wage levels. The novelties and contributions of our approach are the following. First, we introduce a dynamic macroeconomic model of technology diffusion, which is the first to directly account for the difference in factor cost proportions in an endogenous cross-country setting. Second, we utilise the Cross-country Historical Adoption of Technology (CHAT) and Penn World Table databases to calibrate the model using non-linear approximation across countries and technologies, which explains about 50% of the variability in technology density. Third, the results of the calibrated model offer a new insight into the dynamics and patterns of technology diffusion of differently developed countries, offering both an approximation of the average technology adoption across differently developed countries over time and an approximation of the relative technology density adoption curves, which are country specific generalisations of the logistic curves and depend highly on the general level of development and wage levels.

Suggested Citation

  • Klemen Knez, 2023. "Technology diffusion and uneven development," Journal of Evolutionary Economics, Springer, vol. 33(4), pages 1171-1195, September.
  • Handle: RePEc:spr:joevec:v:33:y:2023:i:4:d:10.1007_s00191-023-00830-w
    DOI: 10.1007/s00191-023-00830-w
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    More about this item

    Keywords

    Technology diffusion; Uneven development; Choice of technique; Wage differentials;
    All these keywords.

    JEL classification:

    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • 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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