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Firm-Heterogeneous Biased Technological Change: A nonparametric approach under endogeneity

Author

Listed:
  • Ruben Dewitte

    (UGENT - Universiteit Gent = Ghent University)

  • Michel Dumont

    (UGENT - Universiteit Gent = Ghent University)

  • Bruno Merlevede

    (UGENT - Universiteit Gent = Ghent University)

  • Glenn Rayp

    (UGENT - Universiteit Gent = Ghent University)

  • Marijn Verschelde

    (LEM - Lille économie management - UMR 9221 - UA - Université d'Artois - UCL - Université catholique de Lille - Université de Lille - CNRS - Centre National de la Recherche Scientifique)

Abstract

We propose a fully nonparametric framework to test to what extent technological change is factor-biased and heterogeneous. We show in a Monte Carlo simulation that our framework resolves the endogeneity issue between productivity and input choice and provides accurate estimates of firm-specific biases. For all Belgian manufacturing industries analyzed, we reject the predominant assumption of Hicks-neutral technological change over the period 1996–2015. We find that technological change is skill-biased, capital saving and domestic materials using. Moreover, we find significant heterogeneity in the pattern of technological change between and within industries. Relying on a rich dataset of firm characteristics, we provide robust indications that firm-level technological change can be attributed to specific firm strategies and technological characteristics.

Suggested Citation

  • Ruben Dewitte & Michel Dumont & Bruno Merlevede & Glenn Rayp & Marijn Verschelde, 2020. "Firm-Heterogeneous Biased Technological Change: A nonparametric approach under endogeneity," Post-Print hal-03001787, HAL.
    • Handle: RePEc:hal:journl:hal-03001787
    DOI: 10.1016/j.ejor.2019.11.063
    Note: View the original document on HAL open archive server: https://hal.science/hal-03001787
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