Firm-Heterogeneous Biased Technological Change: A nonparametric approach under endogeneity

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June 16, 2020

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info:eu-repo/semantics/altIdentifier/doi/10.1016/j.ejor.2019.11.063

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http://creativecommons.org/licenses/by-nc/ , info:eu-repo/semantics/OpenAccess




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Ruben Dewitte et al., « Firm-Heterogeneous Biased Technological Change: A nonparametric approach under endogeneity », HALSHS : archive ouverte en Sciences de l’Homme et de la Société, ID : 10.1016/j.ejor.2019.11.063


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We propose a fully nonparametric framework to test to what extent technological change is factor-biased and heterogeneous. We show in a Monte Carlo simulation that our framework resolves the endogeneity issue between productivity and input choice and provides accurate estimates of firm-specific biases. For all Belgian manufacturing industries analyzed, we reject the predominant assumption of Hicks-neutral technological change over the period 1996–2015. We find that technological change is skill-biased, capital saving and domestic materials using. Moreover, we find significant heterogeneity in the pattern of technological change between and within industries. Relying on a rich dataset of firm characteristics, we provide robust indications that firm-level technological change can be attributed to specific firm strategies and technological characteristics.

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