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Growth Decomposition and Estimation of Investment-Specific Technological Change in Iran’s Industry

Hosseini Jebeli, Hossein | 2011

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  1. Type of Document: M.Sc. Thesis
  2. Language: Farsi
  3. Document No: 42284 (44)
  4. University: Sharif University of Technology
  5. Department: Management and Economics
  6. Advisor(s): Nili, Massoud; Abedini, Javad
  7. Abstract:
  8. The aim of this research was estimation of investment-specific technological change, using industrial database which is published annually by Bureau of Statistics of Iran. Investment-specific technological change is the quality improvement of investment in capital goods during the time. Before estimation of this rate, production function (regarding 130 industrial activities and during 14 years, 1994-2007) was estimated. All industries classified in 4 groups based on the level of technology used in them. Then factor’s production elasticities were compared between different groups of industries. The results showed that in high-tech industries the elasticities of skilled workers, import and research and development (R&D) costs of previous year were more and the elasticity of unskilled workers was less than these elasticities in the low-tech industries. Therefore these elasticities are significantly different in industries and this finding illustrates the dependence of growth sources in different industries to the technology level that is used in them. In the second part, using a nonlinear production function, investment- specific technological change was estimated. Being robust to the speed of depreciation, annual average rate of investment-specific technological change was estimated to be between 0.08 and 0.16 percent in that period. In industries with higher rate of investment-specific technological change, ignoring this kind of technological change resulted in the overestimation of Total Factor Productivity (TFP). Estimation of investment coefficients in production function, instead of previous assumption of a constant rate, showed that investment in equipment has a positive and significant effect on value added of industries until at most 3 years. Besides, as expected, in high-tech industries compared to the low-techs, later investments were more effectual on value added than the earlier ones
  9. Keywords:
  10. Total Factor Productivity (TFP) ; Manufacturing Firms ; Investment-Specific Technological Change ; Technological Embediment

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