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Neutral or factor saving innovations?

Author

Listed:
  • Hernando Zuleta
  • Andrés Zambrano

Abstract

We present a theoretical argument to identify the conditions under which a firm prefers to invest in factor saving innovations rather than neutral innovations. We prove that incentives to invest in factor saving innovations positively depend on i) total factor productivity and ii) the scarcity of the factor.

Suggested Citation

  • Hernando Zuleta & Andrés Zambrano, 2018. "Neutral or factor saving innovations?," Documentos CEDE 17134, Universidad de los Andes, Facultad de Economía, CEDE.
  • Handle: RePEc:col:000089:017134
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    File URL: https://repositorio.uniandes.edu.co/bitstream/handle/1992/41064/dcede2018-65.pdf
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    References listed on IDEAS

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    3. Hernando Zuleta, 2008. "Factor Saving Innovations and Factor Income Shares," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 11(4), pages 836-851, October.
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    6. Daron Acemoglu, 2010. "When Does Labor Scarcity Encourage Innovation?," Journal of Political Economy, University of Chicago Press, vol. 118(6), pages 1037-1078.
    7. repec:oup:qjecon:v:129:y:2013:i:1:p:61-103 is not listed on IDEAS
    8. Zeira, Joseph, 2005. "Machines as Engines of Growth," CEPR Discussion Papers 5429, C.E.P.R. Discussion Papers.
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    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Dawson, John W. & Sturgill, Brad, 2022. "Market Institutions and Factor Shares Across Countries," Structural Change and Economic Dynamics, Elsevier, vol. 60(C), pages 266-289.

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    More about this item

    Keywords

    Factor Shares; Production Function; Productivity.;
    All these keywords.

    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • E01 - Macroeconomics and Monetary Economics - - General - - - Measurement and Data on National Income and Product Accounts and Wealth; Environmental Accounts
    • E25 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Aggregate Factor Income Distribution

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