Firms size and directed technological change

Firms size and directed technological change The analysis of the characteristics of firms helps to understand the causes and consequences of the direction of technological change. Firms differ substantially with respect to the type of technological knowledge they can generate and exploit through technological innovations. This in turn has major effects on the direction of technological change they are able to introduce. Large firms able to command the recombinant generation of codified knowledge with a strong scientific base are more likely to introduce neutral technological changes that consist in a shift effect of production functions. Small firms that rely more on tacit and external knowledge are more likely to rely on technologies directed toward the most intensive use of locally abundant production factors. The effects of this difference in terms of the resulting total factor productivity growth are important and can be grasped only when the changes in output elasticity of production factors in growth accounting are properly appreciated. The empirical evidence for a sample of 6,600 Italian firms observed between 1996 and 2005 confirms that large firms introduced mainly neutral technological changes while small firms with lower levels of profitability introduced biased technological changes. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Small Business Economics Springer Journals

Firms size and directed technological change

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Publisher
Springer Journals
Copyright
Copyright © 2014 by Springer Science+Business Media New York
Subject
Economics / Management Science; Management/Business for Professionals; Microeconomics; Entrepreneurship; Industrial Organization
ISSN
0921-898X
eISSN
1573-0913
D.O.I.
10.1007/s11187-014-9593-1
Publisher site
See Article on Publisher Site

Abstract

The analysis of the characteristics of firms helps to understand the causes and consequences of the direction of technological change. Firms differ substantially with respect to the type of technological knowledge they can generate and exploit through technological innovations. This in turn has major effects on the direction of technological change they are able to introduce. Large firms able to command the recombinant generation of codified knowledge with a strong scientific base are more likely to introduce neutral technological changes that consist in a shift effect of production functions. Small firms that rely more on tacit and external knowledge are more likely to rely on technologies directed toward the most intensive use of locally abundant production factors. The effects of this difference in terms of the resulting total factor productivity growth are important and can be grasped only when the changes in output elasticity of production factors in growth accounting are properly appreciated. The empirical evidence for a sample of 6,600 Italian firms observed between 1996 and 2005 confirms that large firms introduced mainly neutral technological changes while small firms with lower levels of profitability introduced biased technological changes.

Journal

Small Business EconomicsSpringer Journals

Published: Jun 13, 2014

References

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