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Measuring the bias of technological change

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  • Jaumandreu, Jordi
  • Doraszelski, Ulrich

Abstract

Technological change can increase the productivity of the various factors of production in equal terms or it can be biased towards a specific factor. We develop an estimator for production functions when productivity is multi-dimensional. We directly assess the bias of technological change by measuring, at the level of the individual firm, how much of it is factor neutral and how much is labor augmenting. Applying our estimator to panel data from Spain, we find that technological change is indeed biased, with both its factor-neutral and its labor-augmenting component causing output to grow by about 2% per year.

Suggested Citation

  • Jaumandreu, Jordi & Doraszelski, Ulrich, 2014. "Measuring the bias of technological change," CEPR Discussion Papers 10275, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:10275
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    More about this item

    Keywords

    Biased technological change; Production function estimation; Productivity;
    All these keywords.

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General

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