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The Localized Introduction Of Biased Technological Change And Productivity Growth. The Empirical Evidence In The Italian Manufacturing Industry

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The features of the industrial system within which innovation processes take place affect the pace and the characteristics of the innovation processes and influence their evolution. The analysis of the industrial structure and of the innovation strategies of firms cannot be separated. The introduction of general technological changes that concern mainly the position rather than the slope of the maps of isoquants characterize the innovation process of large corporations. Small manufacturing firms instead rely upon technological knowledge implemented by means of learning processes and introduce technological changes typically characterized by a bias finalized to make the most efficient use of locally abundant production factors. Their contribution to economic growth in terms of total factor productivity is important and can be grasped only when the role of output elasticity of production factors in growth accounting is properly appreciated. The empirical evidence for a sample of 6000 Italian firms in the years 1997-2005 confirms that localized technological changes were mainly introduced by small firms with low levels of profitability and high wages and had significant positive effects on their economic efficiency.

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