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Gross Investment And Technological Change


  • Paul Stoneman
  • Myung-Joong Kwon


The impact of technological change upon gross investment has been relatively ignored. Building upon the foundations of the analysis of technological diffusion, an empirical model of gross investment is constructed that takes due account of technological change. This model is then tested upon a panel data set covering 185 UK firms over the period from 1984 to 1992. The results support the hypothesis that there are significant relationships of the expected signs between firm level gross investment, indicators of technological opportunity; the price of the capital goods that embody new technology, and firm and industry characteristics. There is also evidence of lagged adjustment effects in the investment process.

Suggested Citation

  • Paul Stoneman & Myung-Joong Kwon, 1998. "Gross Investment And Technological Change," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 7(3), pages 221-243.
  • Handle: RePEc:taf:ecinnt:v:7:y:1998:i:3:p:221-243
    DOI: 10.1080/10438599800000035

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    References listed on IDEAS

    1. Im, Kyung So & Pesaran, M. Hashem & Shin, Yongcheol, 2003. "Testing for unit roots in heterogeneous panels," Journal of Econometrics, Elsevier, vol. 115(1), pages 53-74, July.
    2. Davies, Stephen W., 1979. "Inter-firm diffusion of process innovations," European Economic Review, Elsevier, vol. 12(4), pages 299-317, October.
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    Investment; Technological change; Innovation JEL Classification: 033; E22;

    JEL classification:

    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity


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