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Technology Adoption, Learning by Doing, and Productivity: A Study of Steel Refining Furnaces

  • Tsuyoshi Nakamura

    (Department of Economics, Tokyo Keizai University)

  • Hiroshi Ohashi

    (Faculty of Economics, University of Tokyo)

Models of vintage-capital learning by doing predict an initial fall in productivity after the introduction of new technology. This paper examines the impact of new technology on plant-level productivity in the Japanese steel industry in the 1950s and 1960s. The introduction of the basic oxygen furnace was the greatest breakthrough in the steel refining process in the last century. We estimate production function, taking account of the differences in technology between the refining furnaces owned by a plant. Estimation results indicate that a more productive plant was likely to adopt the new technology, and that the adoption would be timed to occur right after the peak of the productivity level achieved with the old technology. We have found that the adoption of the new technology primarily accounted not only for the industry's productivity slowdown in the early 1960s, but also for the industry's remarkable growth in the post-war period. These results are robust to endogeneity in the choice of input and technology.

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Paper provided by CIRJE, Faculty of Economics, University of Tokyo in its series CIRJE F-Series with number CIRJE-F-368.

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Length: 40 pages
Date of creation: Sep 2005
Date of revision:
Handle: RePEc:tky:fseres:2005cf368
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  1. Hiroyuki Kasahara & Joel Rodrigue, 2005. "Does the Use of Imported Intermediates Increase Productivity? Plant-Level Evidence," University of Western Ontario, Economic Policy Research Institute Working Papers 20057, University of Western Ontario, Economic Policy Research Institute.
  2. Hiroshi Ohashi, 2004. "Learning by Doing, Export Subsidies, and Industry Growth: Japanese Steel in the 1950s and 1960s," CIRJE F-Series CIRJE-F-280, CIRJE, Faculty of Economics, University of Tokyo.
  3. Gort, Michael & Wall, Richard A., 1998. "Obsolescence, input augmentation, and growth accounting," European Economic Review, Elsevier, vol. 42(9), pages 1653-1665, November.
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  7. Nina Pavcnik, 2000. "Trade Liberalization, Exit, and Productivity Improvements: Evidence from Chilean Plants," NBER Working Papers 7852, National Bureau of Economic Research, Inc.
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  9. Jeremy Greenwood & Boyan Jovanovic, 1998. "Accounting for Growth," NBER Working Papers 6647, National Bureau of Economic Research, Inc.
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  10. C. Lanier Benkard, 2000. "Learning and Forgetting: The Dynamics of Aircraft Production," American Economic Review, American Economic Association, vol. 90(4), pages 1034-1054, September.
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  13. Z, Griliches & Jacques Mairesse, 1997. "Production Functions : The Search for Identification," Working Papers 97-30, Centre de Recherche en Economie et Statistique.
  14. James Levinsohn & Amil Petrin, 2003. "Estimating Production Functions Using Inputs to Control for Unobservables," Review of Economic Studies, Oxford University Press, vol. 70(2), pages 317-341.
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