Thursday 26 February 2009

Recent reading on technology

Here is part of my research reading in the last week on technology spread. The papers are generally available through Google Scholar. I have added brief comments on the paper's relevance:

Doms and Lewis. Labor supply and personal computer adoption:
Empirically finds that in the United States, human capital is a significant determinant of personal computer adoption rates by companies. Instruments (from old college and immigration data) are used to increase the likelihood that the link is causal. It is not obvious from theory whether the inverse relationship is the major one, ie that companies adopt computers and then people learn skills to take advantage of them, because both directions are compatible with income maximisation and the question is on decision sequencing by profit maximising agents. The results are compatible with the theory that says that companies adopt technology specific to their human capital availability.

Eaton and Kortum. Technology, geography, and trade:
A static model of trade with a core of different technology endowments across countries and a small macroeconomic model built around them. What caught my attention was the empirical estimation of the trade equation 28 (with inputs from equation 29 on trade barriers). The estimates are made on OECD countries, predicting the trade shares that countries have with each other based on geography and technology. If we assume that other countries with similar wealth would also enter the equations with the same parameters, then we can calculate Africa's trade share if it was rich, and also calculate the material benefits to other countries of African development.

Holmes and Schmitz. Resistance to new technology and trade between areas:
An argument and model of how trade, by altering incentives to adoption and competition, reduces domestic parties' opposition to introduction of new technologies.

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