Barriers to Technology Adoption and Development

We propose a theory of economic development in which technology adoption and barriers to such adoptions are the focus. The size of these barriers differs across countries and time. The larger these barriers, the greater the investment a firm must make to adopt a more advanced technology. The model i...

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Bibliographic Details
Published in:The Journal of political economy 1994-04, Vol.102 (2), p.298-321
Main Authors: Parente, Stephen L., Prescott, Edward C.
Format: Article
Language:English
Subjects:
Barriers
Capital investments
Capital stocks
Development
Economic development
Economic growth models
Economic impact
Economic models
Economic theory
Financial investments
Income distribution
Income level
Innovation adoption
Japan
Political Economy
Structural capital
Studies
Technological change
Technology
Technology adoption
Technology transfer
U.S.A
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Summary:We propose a theory of economic development in which technology adoption and barriers to such adoptions are the focus. The size of these barriers differs across countries and time. The larger these barriers, the greater the investment a firm must make to adopt a more advanced technology. The model is calibrated to the U.S. balanced growth observations and the postwar Japanese development miracle. For this calibrated structure we find that the disparity in technology adoption barriers needed to account for the huge observed income disparity across countries is not implausibly large.
ISSN:0022-3808
1537-534X
DOI:10.1086/261933