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The economics of technological congruence

Technological congruence is defined by the matching between the relative size of outputs’ elasticity with the relative abundance and cost of inputs in local factor markets. With given total costs, output is larger the larger is the output elasticity of the cheapest input. Technological congruence is a powerful tool that helps grasping many controversial aspects of growth accounting, international division of labor and specialization, technological and structural change. For years, it had received little attention because of the wide consensus that technological change was exogenous and neutral. But also subsequently, notwithstanding the developments made in the endogenous growth modeling, little attempt was made to provide a more advanced understanding of technological congruence. Its appreciation stems directly from the advances of the economics of innovation and its recent developments in understanding the endogenous determinants of the introduction and diffusion of directed technological changes. The levels of technological congruence are most relevant to influence the actual efficiency and to shape the competitive advance of firms and countries.

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Paper provided by University of Turin in its series Department of Economics and Statistics Cognetti de Martiis LEI & BRICK - Laboratory of Economics of Innovation "Franco Momigliano", Bureau of Research in Innovation, Complexity and Knowledge, Collegio Carlo Alberto. WP series with number 201304.

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Length: 13 pages
Date of creation: Apr 2013
Date of revision:
Handle: RePEc:uto:labeco:201304
Contact details of provider: Web page: http://www.unito.it/
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  1. Francesco Caselli, 2007. "The Marginal Product of Capital," The Quarterly Journal of Economics, MIT Press, vol. 122(2), pages 535-568, 05.
  2. Maryann Feldman, 1999. "The New Economics Of Innovation, Spillovers And Agglomeration: Areview Of Empirical Studies," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 8(1-2), pages 5-25.
  3. Antonelli Cristiano & Crespi Francesco, 2011. "Matthew effects and R&D subsidues: knowledge cumulability in high-tech and low-tech industries," Department of Economics and Statistics Cognetti de Martiis LEI & BRICK - Laboratory of Economics of Innovation "Franco Momigliano", Bureau of Research in Innovation, Complexity and Knowledge, Collegio 201111, University of Turin.
  4. Daron Acemoglu, 2003. "Labor- And Capital-Augmenting Technical Change," Journal of the European Economic Association, MIT Press, vol. 1(1), pages 1-37, 03.
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  7. Alan B. Krueger, 1999. "Measuring Labor's Share," American Economic Review, American Economic Association, vol. 89(2), pages 45-51, May.
  8. Antonelli, Cristiano, 2006. "Localized technological change and factor markets: constraints and inducements to innovation," Structural Change and Economic Dynamics, Elsevier, vol. 17(2), pages 224-247, June.
  9. Pierre Mohnen & Lars-Hendrick Röller, 2001. "Complementarities in Innovation Policy," CIRANO Working Papers 2001s-28, CIRANO.
  10. Gehringer, Agnieszka, 2010. "Pecuniary knowledge externalities and innovation: Intersectoral linkages and their effects beyond technological spillovers," Center for European, Governance and Economic Development Research Discussion Papers 100, University of Goettingen, Department of Economics.
  11. Robert E. Hall & Charles I. Jones, 1999. "Why Do Some Countries Produce So Much More Output per Worker than Others?," NBER Working Papers 6564, National Bureau of Economic Research, Inc.
  12. Zuleta, Hernando, 2012. "Variable factor shares, measurement and growth accounting," Economics Letters, Elsevier, vol. 114(1), pages 91-93.
  13. Daron Acemoglu, 2002. "Directed Technical Change," Review of Economic Studies, Oxford University Press, vol. 69(4), pages 781-809.
  14. Franco Malerba, 2005. "Sectoral systems of innovation: a framework for linking innovation to the knowledge base, structure and dynamics of sectors," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 14(1-2), pages 63-82.
  15. Jerzmanowski, Michal, 2007. "Total factor productivity differences: Appropriate technology vs. efficiency," European Economic Review, Elsevier, vol. 51(8), pages 2080-2110, November.
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