Biased Technology and Contribution of Technological Change to Economic Growth: Firm-Level Evidence
The increasing mean wage-interest ratio and decreasing mean capital-labor ra- tio observed in some Chinese manufacturing industries suggest that technological change is factor-biased. In order to study the nature of technological change and its contribution to economic growth, this paper builds and estimates a structural model of fi rms' production decisions with biased technological change. This model allows me to identify and estimate the firm-time-specifi c factor-biased technology using micro data. The basic idea of the estimation is that the choice of inputs contains information about the unobserved productivities; therefore we can invert the inputs demand function to recover the unobserved productivities. I estimate the model from a firm-level data set of four Chinese Manufacturing industries. The empirical results provide fi rm-level evidence of biased technological change over time and biased technological dispersion across rms. The estimation results show that technological change contributes to the growth of gross output by 1.81%-3.10% annually and value added by 12.67%-21.16%, which is higher than the combined contribution of capital and labor. Capital efficiency grows much faster than la- bor efficiency in China, and the contribution of technological change to economic growth is mainly due to the change of capital efficiency. The results also show that large fi rms have a higher capital-labor efficiency ratio and that biased technological dispersion explains a large part of the dispersion of capital-labor ratio across fi rms.
|Date of creation:||01 Apr 2013|
|Contact details of provider:|| Postal: 555 East Wells Street, Suite 1100, Milwaukee, Wisconsin 53202|
Phone: (414) 918-3190
Fax: (414) 276-3349
Web page: http://www.aaea.org
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Stevenson, Rodney, 1980. "Measuring Technological Bias," American Economic Review, American Economic Association, vol. 70(1), pages 162-173, March.
- Qu Feng & William C. Horrace, 2012.
"Alternative technical efficiency measures: Skew, bias and scale,"
Journal of Applied Econometrics,
John Wiley & Sons, Ltd., vol. 27(2), pages 253-268, 03.
- Qu Feng & William C. Horrace, 2010. "Alternative Technical Efficiency Measures: Skew, Bias, and Scale," Center for Policy Research Working Papers 121, Center for Policy Research, Maxwell School, Syracuse University.
- Antràs Pol, 2004. "Is the U.S. Aggregate Production Function Cobb-Douglas? New Estimates of the Elasticity of Substitution," The B.E. Journal of Macroeconomics, De Gruyter, vol. 4(1), pages 1-36, April.
- Antras, Pol, 2004. "Is the U.S. Aggregate Production Function Cobb-Douglas? New Estimates of the Elasticity of Substitution," Scholarly Articles 3196325, Harvard University Department of Economics.
- Sofronis K. Clerides & Saul Lach & James R. Tybout, 1998. "Is Learning by Exporting Important? Micro-Dynamic Evidence from Colombia, Mexico, and Morocco," The Quarterly Journal of Economics, Oxford University Press, vol. 113(3), pages 903-947.
- Sofronis Clerides & Saul Lach & James Tybout, "undated". "Is "Learning-by-Exporting" Important? Micro-dynamic Evidence from Colombia, Mexico, and Morocco," Finance and Economics Discussion Series 1996-30, Board of Governors of the Federal Reserve System (U.S.).
- Sofronis Clerides & Saul Lach & James Tybout, 1996. "Is "learning-by-exporting" important? Micro-dynamic evidence from Colombia, Mexico and Morocco," Finance and Economics Discussion Series 96-30, Board of Governors of the Federal Reserve System (U.S.).
- Sofronis Clerides & Saul Lach & James Tybout, 1996. "Is "Learning-by-Exporting" Important? Micro-Dynamic Evidence from Colombia, Mexico and Morocco," NBER Working Papers 5715, National Bureau of Economic Research, Inc.
- Mark Doms & Timothy Dunne & Kenneth R. Troske, 1997. "Workers, Wages, and Technology," The Quarterly Journal of Economics, Oxford University Press, vol. 112(1), pages 253-290.
- Kaddour Hadri, 2000. "Testing for stationarity in heterogeneous panel data," Econometrics Journal, Royal Economic Society, vol. 3(2), pages 148-161.
- Kaddour Hadri, 1999. "Testing For Stationarity In Heterogeneous Panel Data," Research Papers 1999_04, University of Liverpool Management School.
- Robert C. Feenstra & Zhiyuan Li & Miaojie Yu, 2014. "Exports and Credit Constraints under Incomplete Information: Theory and Evidence from China," The Review of Economics and Statistics, MIT Press, vol. 96(4), pages 729-744, October.
- Robert C. Feenstra & Zhiyuan Li & Miaojie Yu, 2011. "Exports and Credit Constraints Under Incomplete Information: Theory and Evidence from China," NBER Working Papers 16940, National Bureau of Economic Research, Inc.
- Rainer Klump & Peter McAdam & Alpo Willman, 2007. "Factor Substitution and Factor-Augmenting Technical Progress in the United States: A Normalized Supply-Side System Approach," The Review of Economics and Statistics, MIT Press, vol. 89(1), pages 183-192, February.
- Amit Gandhi & Salvador Navarro & David Rivers, 2011. "On the Identification of Production Functions: How Heterogeneous is Productivity?," University of Western Ontario, Centre for Human Capital and Productivity (CHCP) Working Papers 20119, University of Western Ontario, Centre for Human Capital and Productivity (CHCP).
- Salvador Navarro & David Rivers & Amit Gandhi, 2012. "On the Identification of Production Functions: How Heterogeneous is Productivity?," 2012 Meeting Papers 105, Society for Economic Dynamics.
- James Levinsohn & Amil Petrin, 2003. "Estimating Production Functions Using Inputs to Control for Unobservables," Review of Economic Studies, Oxford University Press, vol. 70(2), pages 317-341.
- Devesh Raval, 2011. "Beyond Cobb-Douglas: Estimation of a CES Production Function with Factor Augmenting Technology," Working Papers 11-05, Center for Economic Studies, U.S. Census Bureau.
- Alok Bhargava, 1986. "On the Theory of Testing for Unit Roots in Observed Time Series," Review of Economic Studies, Oxford University Press, vol. 53(3), pages 369-384. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:ags:aaea13:150225. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search)
If references are entirely missing, you can add them using this form.