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Identifier to cite or link to this item: https://hdl.handle.net/10086/13909

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Title
Technology Upgrading with Learning Cost
Creator
Creator Name
Ahn, Sanghoon Ahn, Sanghoon
Affiliation
Affiliation Name
Hong Kong University of Science and Technology
Editor
Contributor Name
Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University
Key Word
Technology
Learning
Total factor productivity (TFP)
Market Value
JEL
O30
O47
G10
D24
Abstract
Adoption of new technology requires diversion of resources from direct production activities to learning/adjusting activities, which could reduce productivity temporarily. Focusing on the existence of such "learning cost", we derive a simple model on the optimal timing for technology upgrading. This model suggests that a firm perceived to have better learning ability will show more frequent technology upgrading and higher market value even with possibly lower current profitability. The model predictions are supported by regression results from a panel data set of more than 1,000 companies in the US during the late 1980s and the early 1990s. Simulations based on an extended model reproduce the negative correlation between investment growth and TFP growth.
Publisher
Institute of Economic Research, Hitotsubashi University
Issued Date
2003-09
Language
English(eng)
Resource Type
technical report
Version Type
VoR
Is Part OfRelation -
Related Title
CEI Working Paper Series ; No. 2003-21
Relation
Related Identifier
URI
  http://cei.ier.hit-u.ac.jp/index.html
NCID
AA11590659
Number of Pages
46
Appears in Collections
CEI Working Paper Series
URL
https://hdl.handle.net/10086/13909