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Firm Dynamics Support the Importance of the Embodied Question
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1725-6704
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EUI ECO; 2009/35
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GABLER, Alain, LICANDRO, Omar, Firm Dynamics Support the Importance of the Embodied Question, EUI ECO, 2009/35 - https://hdl.handle.net/1814/12677
Abstract
This paper contributes to the literature on both embodied technical
progress and firm dynamics, by formulating an endogenous growth
model where selection and imitation play a fundamental role in helping
capital good producers to learn about the productivity of technologies
embodied in new plants. By calibrating the model to some key aggregates
particularly relevant for the embodied capital literature, among
them the growth rate of the relative investment price, the model quantitatively
replicates the main facts associated to firm dynamics, such
as the entry rate and the tail index of the establishment size distribution.
In line with the previous literature, it also predicts a contribution
to productivity growth of embodied technical progress and selection of
around 60%