An Intensive Exploration of Technology Diffusion
We present a tractable model for the analysis of the relationship between economic growth and the intensive and extensive margins of technology adoption. At the aggregate level, our model is isomorphic to a neoclassical growth model. The microeconomic underpinnings of growth come from technology adoption of firms, both at the extensive and the intensive margin. We use a data set of 15 technologies and 166 countries to estimate the intensive and extensive margin of adoption using the structural equations derived from our model. We find that the variability across countries in the intensive margin is higher than in the extensive margin. The cross country variation in intensive margin of adoption accounts for around 40% of the variation in income per capita.
We would like to thank Mar Reguant for comments and suggestions. Comin would like to thank the NSF (Grants # SES-0517910 and SBE-738101) for their financial assistance. The views expressed in this paper solely reflect those of the authors and not necessarily those of the National Bureau of Economic Research.
Technology Diffusion: Measurement, Causes and Consequences (with Diego Comin), Handbook of Economic Growth, vol. 2 .