Transnational transfer effect of technological progress bias: model deduction and empirical evidence

DONG Zhiqing1 JIAO Cuihong2 WANG Linhui1

(1.School of Economics, East China Normal University 200241)
(2.Business School of Jilin University 130012)

【Abstract】Direction and intensity of technological progress bias in China have become a focus of the empirical literature. However, the source of technological progress bias change and its cause have not drawn attention. From the perspective of technology progress bias transfer, this paper develops a technological progress bias transfer model by introducing both domestic innovation and technological imports, and describes the transfer mechanism of technological progress bias from developed countries to developing countries, and simulate the dynamic process of transfer path of technological progress bias. It shows that the direction and intensity of technological progress bias change are both likely to change. The endowment structure plays a decisive role in the transfer process from developed to developing countries, but the intensity and direction of the effect depend on the adaptability of technological progress bias, which cause the change of the factor input structure in the process of changing technology application in developing countries. The direction and the intensity of technological progress bias transfer are subject to technological adaptability, which has threshold effect feature. When the adaptability of technological progress bias in factor endowment is above the threshold, the introduction of capital-biased technology will promote the upgrading of the endowment structure, thus contributing to technological progress biased toward the direction of their abundant factors, and eventually improving technology application scope and productivity. Thus, a country needs to pay attention to the impact of technological progress bias when introducing advanced technology, and select the appropriate technologies matched with the local structure of factor endowments.

【Keywords】 transnational transfer effect of technological progress bias; factor structure; technological adaptability;

【DOI】

【Funds】 Major Project of National Social Science Foundation of China (15AZD002) General Project of National Natural Science Foundation of China (71573088) Project of Shanghai Shuguang Project (14SG24)

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(Translated by GUO Rongxing)

    Footnote

    [1]. ① Technological progress bias index reflects the change rate of the ratio of capital-labor marginal output caused by technological progress. When the value is greater (less) than 0, it means that technological progress is more conducive to the improvement of the marginal output of capital (labor), namely, technological progress biased towards the capital (labor). [^Back]

    [2]. ① According to judgment method of Acemoglu [1] about the technological progress bias, in CES production function, the effect of relative technological efficiency on the ratio of capital-labor marginal output is, if the elasticity of substitution ε < 1, then we haveThe decrease means that technological progress is biased towards capital; if the elasticity of substitution ε > 1, then we haveThe increase means that technological progress is biased towards labor; if ε = 1, then technological progress is neutral. Thus, when the elasticity of substitution is fixed, B/A can indicate the technological progress bias. [^Back]

    [3]. ① There are some differences of the elasticity of substitution in factor endowment structure in different countries. But when the capital-labor elasticity of substitution is less than 1, the difference of the elasticity of substitution between domestic and foreign countries will not affect the results of the model. In order to simplify the model and facilitate the analysis, this paper does not distinguish between domestic and foreign elasticity of substitution. [^Back]

    [4]. ① In fact, the parameter in the reasonable range does not affect the conclusion of numerical simulation. [^Back]

    [5]. ① The transfer rate of technological progress bias βT = △β/△βF. [^Back]

    [6]. (2) Limited by space, specific simulation results are not given here. They are available at request. [^Back]

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This Article

ISSN:1006-480X

CN: 11-3536/F

Vol , No. 10, Pages 74-91

October 2016

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Article Outline

Abstract

  • 1 Introduction
  • 2 Theoretical model
  • 3 Parameter assignment and model inference
  • 4 Numerical simulation results and evaluation
  • 5 Transnational transfer and technological application of technological progress bias: case study on modern technology introduction in China
  • 6 Conclusions and policy implications
  • Footnote

    References