New Product Technology, Accumulation, and Growth

This paper asks whether new technological capacity for producing and exporting additional products provides incentives for greater capital accumulation, without being fully reflected in a higher rate of total factor productivity (TFP) growth. Using a highly disaggregated data set of each country...

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Main Author:	Khan, Faruk A.
Format:	Policy Research Working Paper
Language:	English
Published:	World Bank, Washington, DC 2012
Subjects:	ABSOLUTE ADVANTAGE BASE YEAR BENCHMARK CAPITAL ACCUMULATION CAPITAL GROWTH CAPITAL STOCK CAPITAL STOCK GROWTH COMMODITIES CONSTANT PRICES CONSUMERS COST OF CAPITAL COUNTRY EXPERIENCES COUNTRY SIZE COUNTRY VARIATION DATA SET DEVELOPING COUNTRIES DIMINISHING RETURNS DISCOUNT RATE DOMESTIC MARKET ECONOMIC GROWTH ELASTICITY ELASTICITY OF SUBSTITUTION EMPIRICAL WORK EQUAL WEIGHT EQUILIBRIUM EXOGENOUS FACTORS EXPENDITURE EXPORTS FACTOR ACCUMULATION FACTOR ENDOWMENTS FACTORS OF PRODUCTION FIRST YEAR GROWTH ACCOUNTING GROWTH EPISODES GROWTH LITERATURE GROWTH PROCESS GROWTH RATE GROWTH RATES HETEROSKEDASTICITY HIGH GROWTH HUMAN CAPITAL INCOME DISTRIBUTION INITIAL STEADY-STATE EQUILIBRIUM INTERNATIONAL TRADE INVESTMENT RATES LEVEL OF CAPITAL NATIONAL INCOME NEGATIVE COEFFICIENT OPTIMIZATION POLICY MEASURES POLICY RESEARCH POLITICAL INSTABILITY POSITIVE EFFECT POSITIVE IMPACT PRODUCT QUALITY PRODUCTION FUNCTION PRODUCTIVITY GROWTH RAPID GROWTH RATES OF RETURN RETURN TO CAPITAL SPREAD STATE EQUILIBRIUM STOCKS TAX INCENTIVES TECHNOLOGICAL PROGRESS TFP TOTAL FACTOR PRODUCTIVITY UTILITY FUNCTION WAGES WORLD MARKET
Online Access:	http://documents.worldbank.org/curated/en/2006/02/6596718/new-product-technology-accumulation-growth http://hdl.handle.net/10986/8739

id	okr-10986-8739
recordtype	oai_dc
spelling	okr-10986-87392021-04-23T14:02:40Z New Product Technology, Accumulation, and Growth Khan, Faruk A. ABSOLUTE ADVANTAGE BASE YEAR BENCHMARK CAPITAL ACCUMULATION CAPITAL GROWTH CAPITAL STOCK CAPITAL STOCK GROWTH COMMODITIES CONSTANT PRICES CONSUMERS COST OF CAPITAL COUNTRY EXPERIENCES COUNTRY SIZE COUNTRY VARIATION DATA SET DEVELOPING COUNTRIES DIMINISHING RETURNS DISCOUNT RATE DOMESTIC MARKET ECONOMIC GROWTH ELASTICITY ELASTICITY OF SUBSTITUTION EMPIRICAL WORK EQUAL WEIGHT EQUILIBRIUM EXOGENOUS FACTORS EXPENDITURE EXPORTS FACTOR ACCUMULATION FACTOR ENDOWMENTS FACTORS OF PRODUCTION FIRST YEAR GROWTH ACCOUNTING GROWTH EPISODES GROWTH LITERATURE GROWTH PROCESS GROWTH RATE GROWTH RATES HETEROSKEDASTICITY HIGH GROWTH HUMAN CAPITAL INCOME DISTRIBUTION INITIAL STEADY-STATE EQUILIBRIUM INTERNATIONAL TRADE INVESTMENT RATES LEVEL OF CAPITAL NATIONAL INCOME NEGATIVE COEFFICIENT OPTIMIZATION POLICY MEASURES POLICY RESEARCH POLITICAL INSTABILITY POSITIVE EFFECT POSITIVE IMPACT PRODUCT QUALITY PRODUCTION FUNCTION PRODUCTIVITY GROWTH RAPID GROWTH RATES OF RETURN RETURN TO CAPITAL SPREAD STATE EQUILIBRIUM STOCKS TAX INCENTIVES TECHNOLOGICAL PROGRESS TFP TOTAL FACTOR PRODUCTIVITY UTILITY FUNCTION WAGES WORLD MARKET This paper asks whether new technological capacity for producing and exporting additional products provides incentives for greater capital accumulation, without being fully reflected in a higher rate of total factor productivity (TFP) growth. Using a highly disaggregated data set of each country's trade flows into the United States, the author constructs a direct and independent measure of technological improvements for each country over time based on the number of new product varieties exported to the United States. The author shows, in a panel data setting, that acquiring the technological capacity for producing new products stimulates more rapid capital accumulation in developing countries, even after holding fixed the rate of TFP growth. His findings provide evidence against the alternative view that technological improvements are essentially unimportant: a view based on the findings of Young (1995) and others that instances of spectacular economic growth have been associated with unspectacular rates of TFP growth. The author provides a model to show how an expansion in the technological capacity for producing additional products can lead to more rapid factor accumulation, without necessarily improving measured TFP. His findings suggest that while rapid accumulation of physical and human capital may have characterized the East Asian growth experience, these gains were stimulated by stellar improvements in technological capacity. 2012-06-21T22:01:25Z 2012-06-21T22:01:25Z 2006-02 http://documents.worldbank.org/curated/en/2006/02/6596718/new-product-technology-accumulation-growth http://hdl.handle.net/10986/8739 English Policy Research Working Paper; No. 3846 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English
topic	ABSOLUTE ADVANTAGE BASE YEAR BENCHMARK CAPITAL ACCUMULATION CAPITAL GROWTH CAPITAL STOCK CAPITAL STOCK GROWTH COMMODITIES CONSTANT PRICES CONSUMERS COST OF CAPITAL COUNTRY EXPERIENCES COUNTRY SIZE COUNTRY VARIATION DATA SET DEVELOPING COUNTRIES DIMINISHING RETURNS DISCOUNT RATE DOMESTIC MARKET ECONOMIC GROWTH ELASTICITY ELASTICITY OF SUBSTITUTION EMPIRICAL WORK EQUAL WEIGHT EQUILIBRIUM EXOGENOUS FACTORS EXPENDITURE EXPORTS FACTOR ACCUMULATION FACTOR ENDOWMENTS FACTORS OF PRODUCTION FIRST YEAR GROWTH ACCOUNTING GROWTH EPISODES GROWTH LITERATURE GROWTH PROCESS GROWTH RATE GROWTH RATES HETEROSKEDASTICITY HIGH GROWTH HUMAN CAPITAL INCOME DISTRIBUTION INITIAL STEADY-STATE EQUILIBRIUM INTERNATIONAL TRADE INVESTMENT RATES LEVEL OF CAPITAL NATIONAL INCOME NEGATIVE COEFFICIENT OPTIMIZATION POLICY MEASURES POLICY RESEARCH POLITICAL INSTABILITY POSITIVE EFFECT POSITIVE IMPACT PRODUCT QUALITY PRODUCTION FUNCTION PRODUCTIVITY GROWTH RAPID GROWTH RATES OF RETURN RETURN TO CAPITAL SPREAD STATE EQUILIBRIUM STOCKS TAX INCENTIVES TECHNOLOGICAL PROGRESS TFP TOTAL FACTOR PRODUCTIVITY UTILITY FUNCTION WAGES WORLD MARKET
spellingShingle	ABSOLUTE ADVANTAGE BASE YEAR BENCHMARK CAPITAL ACCUMULATION CAPITAL GROWTH CAPITAL STOCK CAPITAL STOCK GROWTH COMMODITIES CONSTANT PRICES CONSUMERS COST OF CAPITAL COUNTRY EXPERIENCES COUNTRY SIZE COUNTRY VARIATION DATA SET DEVELOPING COUNTRIES DIMINISHING RETURNS DISCOUNT RATE DOMESTIC MARKET ECONOMIC GROWTH ELASTICITY ELASTICITY OF SUBSTITUTION EMPIRICAL WORK EQUAL WEIGHT EQUILIBRIUM EXOGENOUS FACTORS EXPENDITURE EXPORTS FACTOR ACCUMULATION FACTOR ENDOWMENTS FACTORS OF PRODUCTION FIRST YEAR GROWTH ACCOUNTING GROWTH EPISODES GROWTH LITERATURE GROWTH PROCESS GROWTH RATE GROWTH RATES HETEROSKEDASTICITY HIGH GROWTH HUMAN CAPITAL INCOME DISTRIBUTION INITIAL STEADY-STATE EQUILIBRIUM INTERNATIONAL TRADE INVESTMENT RATES LEVEL OF CAPITAL NATIONAL INCOME NEGATIVE COEFFICIENT OPTIMIZATION POLICY MEASURES POLICY RESEARCH POLITICAL INSTABILITY POSITIVE EFFECT POSITIVE IMPACT PRODUCT QUALITY PRODUCTION FUNCTION PRODUCTIVITY GROWTH RAPID GROWTH RATES OF RETURN RETURN TO CAPITAL SPREAD STATE EQUILIBRIUM STOCKS TAX INCENTIVES TECHNOLOGICAL PROGRESS TFP TOTAL FACTOR PRODUCTIVITY UTILITY FUNCTION WAGES WORLD MARKET Khan, Faruk A. New Product Technology, Accumulation, and Growth
relation	Policy Research Working Paper; No. 3846
description	This paper asks whether new technological capacity for producing and exporting additional products provides incentives for greater capital accumulation, without being fully reflected in a higher rate of total factor productivity (TFP) growth. Using a highly disaggregated data set of each country's trade flows into the United States, the author constructs a direct and independent measure of technological improvements for each country over time based on the number of new product varieties exported to the United States. The author shows, in a panel data setting, that acquiring the technological capacity for producing new products stimulates more rapid capital accumulation in developing countries, even after holding fixed the rate of TFP growth. His findings provide evidence against the alternative view that technological improvements are essentially unimportant: a view based on the findings of Young (1995) and others that instances of spectacular economic growth have been associated with unspectacular rates of TFP growth. The author provides a model to show how an expansion in the technological capacity for producing additional products can lead to more rapid factor accumulation, without necessarily improving measured TFP. His findings suggest that while rapid accumulation of physical and human capital may have characterized the East Asian growth experience, these gains were stimulated by stellar improvements in technological capacity.
format	Publications & Research :: Policy Research Working Paper
author	Khan, Faruk A.
author_facet	Khan, Faruk A.
author_sort	Khan, Faruk A.
title	New Product Technology, Accumulation, and Growth
title_short	New Product Technology, Accumulation, and Growth
title_full	New Product Technology, Accumulation, and Growth
title_fullStr	New Product Technology, Accumulation, and Growth
title_full_unstemmed	New Product Technology, Accumulation, and Growth
title_sort	new product technology, accumulation, and growth
publisher	World Bank, Washington, DC
publishDate	2012
url	http://documents.worldbank.org/curated/en/2006/02/6596718/new-product-technology-accumulation-growth http://hdl.handle.net/10986/8739
_version_	1764405918218321920

New Product Technology, Accumulation, and Growth

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