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Measuring the bias of technological change

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  • Doraszelski, Ulrich
  • Jaumandreu, Jordi

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

  • Doraszelski, Ulrich & Jaumandreu, Jordi, 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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    References listed on IDEAS

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    Cited by:

    1. repec:eee:appene:v:211:y:2018:i:c:p:743-754 is not listed on IDEAS
    2. Johanna Vogel & Kurt Kratena & Kathrin Hranyai, 2015. "The Bias of Technological Change in Europe," WWWforEurope Working Papers series 98, WWWforEurope.
    3. Jordi Jaumandreu & Shuheng Lin, 2018. "Prices under Innovation: Evidence from Manufacturing Firms," Working Papers 2019-07-04, Wang Yanan Institute for Studies in Economics (WISE), Xiamen University.
    4. James Harrigan & Ariell Reshef & Farid Toubal, 2018. "Techies, Trade, and Skill-Biased Productivity," NBER Working Papers 25295, National Bureau of Economic Research, Inc.
    5. Laurens Cherchye & Thomas Demuynck & Bram De Rock & Marijn Verschelde, 2018. "Nonparametric Production Analysis with Unobserved Heterogeneity in Productivity," Working Papers ECARES 2018-25, ULB -- Universite Libre de Bruxelles.
    6. Crass, Dirk & Peters, Bettina, 2014. "Intangible assets and firm-level productivity," ZEW Discussion Papers 14-120, ZEW - Leibniz Centre for European Economic Research.

    More about this item

    Keywords

    biased technological change; production function estimation; productivity;

    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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