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Technology Sophistication Across Establishments

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  • Diego A. Comin
  • Xavier Cirera
  • Marcio Cruz

Abstract

This paper examines technology sophistication in establishments. To comprehensively measure technology sophistication, we create a grid that covers key business functions and the technologies used to conduct them. Analyzing data from over 21,000 establishments in 15 countries, we find that the most widely used technology is usually not the most sophisticated available in the business function. There is significant variation in technology sophistication across and within countries, explaining 31% of productivity dispersion and over half of the agricultural productivity gap. The sophistication of widely used technologies is more relevant for productivity than the most advanced technologies. More sophisticated technologies are appropriate for both developed and developing countries.

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  • Diego A. Comin & Xavier Cirera & Marcio Cruz, 2025. "Technology Sophistication Across Establishments," NBER Working Papers 33358, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:33358
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    JEL classification:

    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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