Why Are Developing Countries So Slow in Adopting New Technologies? The Aggregate and Complementary Impact of Micro Distortions
This paper explores how developmental and regulatory impediments to resource reallocation limit the ability of developing countries to adopt new technologies. An efficient economy innovates quickly; but when the economy is unable to redeploy resour...
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| Format: | Policy Research Working Paper |
| Language: | English |
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2012
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| Online Access: | http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20100803112829 http://hdl.handle.net/10986/3877 |
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okr-10986-38772021-04-23T14:02:13Z Why Are Developing Countries So Slow in Adopting New Technologies? The Aggregate and Complementary Impact of Micro Distortions Bergoeing, Raphael Loayza, Norman V. Piguillem, Facundo ABSTRACTS ADVANCED TECHNOLOGY ALLOCATION ASSET PRICES AUTOMOBILES AVERAGE PRODUCTIVITY BANKRUPTCY BARRIER BASIC BENCHMARK BUREAUCRACY BUSINESS ACTIVITIES BUSINESS CYCLE BUSINESS CYCLES BUSINESS ENTRY BUSINESS INDICATORS BUSINESS REGULATION CAPITAL ACCUMULATION CAPITAL STOCK COMPONENTS CONSTANT RETURNS TO SCALE CONSUMERS COST OF CAPITAL COUNTRY RISK COUNTRY TO COUNTRY COVARIANCE MATRIX DEVELOPING COUNTRIES DEVELOPING COUNTRY DEVELOPING ECONOMIES DEVELOPMENT ECONOMICS DIVIDEND ECONOMIC ACTIVITY ECONOMIC CRISIS ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC REFORMS EQUILIBRIUM FEDERAL RESERVE FEDERAL RESERVE BANK FINANCIAL SUPPORT GDP GDP PER CAPITA GENERAL EQUILIBRIUM ANALYSIS GOVERNMENT BUDGET GROWTH RATE GROWTH RATES HUMAN CAPITAL INCOME INCOME LEVELS INCOMES INCUMBENT INDEXES INDUSTRIAL COUNTRIES INFORMATION REVOLUTION INFORMATION TECHNOLOGIES INFORMATION TECHNOLOGY INNOVATION INTEREST RATES INTERNATIONAL COMPARISONS INTERNATIONAL TRADE ITC JOB CREATION JUDICIAL SYSTEM LABOR MARKET LEGAL SYSTEM LESS DEVELOPED COUNTRIES LOTTERIES MACROECONOMICS MANUFACTURING MARGINAL PRODUCTIVITY MARGINAL UTILITY MARKET REGULATIONS MONOPOLY NET CAPITAL NETWORKS NEW TECHNOLOGIES NEW TECHNOLOGY OUTPUT GAP OUTPUT GAPS OUTPUT PER CAPITA OUTPUT RATIOS PC PERSONAL COMPUTERS POLITICAL ECONOMY POLITICAL SYSTEM POTENTIAL OUTPUT PRICE CONTROLS PRODUCT MARKETS PRODUCTION FUNCTION PRODUCTION GOODS PRODUCTION INPUTS PRODUCTION PROCESS PRODUCTIVITIES PRODUCTIVITY PRODUCTIVITY GROWTH PROFIT MAXIMIZATION RANDOM WALK RATE OF GROWTH REAL INTEREST RATE RED TAPE REGRESSION ANALYSIS REGULATORY IMPEDIMENTS REGULATORY RESTRICTIONS REPUBLIC RESULT RESULTS SIMULATION STARTUPS TAX TECHNOLOGICAL ADVANCES TECHNOLOGICAL INNOVATION TECHNOLOGICAL INNOVATIONS TELECOMMUNICATIONS THIRD WORLD TOTAL FACTOR PRODUCTIVITY TRANSMISSION TRANSPARENCY TURNOVER UNEMPLOYMENT USERS USES UTILITY FUNCTION UTILITY FUNCTIONS VOLATILITY WAGES WEB WORLD DEVELOPMENT INDICATORS This paper explores how developmental and regulatory impediments to resource reallocation limit the ability of developing countries to adopt new technologies. An efficient economy innovates quickly; but when the economy is unable to redeploy resources away from inefficient uses, technological adoption becomes sluggish and growth is reduced. The authors build a model of heterogeneous firms and idiosyncratic shocks, where aggregate long-run growth occurs through the adoption of new technologies, which in turn requires firm destruction and rebirth. After calibrating the model to leading and developing economies, the authors analyze its dynamics in order to clarify the mechanism based on firm renewal. The analysis uses the steady-state characteristics of the model to provide an explanation for long-run output gaps between the United States and a large sample of developing countries. For the median less-developed country in the sample, the model accounts for more than 50 percent of the income gap with respect to the United States, with 60 percent of the simulated gap being explained by developmental and regulatory barriers taken individually, and 40 percent by their interaction. Thus, the benefits from market reforms are largely diminished if developmental and regulatory distortions to firm dynamics are not jointly addressed. 2012-03-19T18:41:24Z 2012-03-19T18:41:24Z 2010-08-01 http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20100803112829 http://hdl.handle.net/10986/3877 English Policy Research working paper ; no. WPS 5393 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank Publications & Research :: Policy Research Working Paper The World Region The World Region |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English |
| topic |
ABSTRACTS ADVANCED TECHNOLOGY ALLOCATION ASSET PRICES AUTOMOBILES AVERAGE PRODUCTIVITY BANKRUPTCY BARRIER BASIC BENCHMARK BUREAUCRACY BUSINESS ACTIVITIES BUSINESS CYCLE BUSINESS CYCLES BUSINESS ENTRY BUSINESS INDICATORS BUSINESS REGULATION CAPITAL ACCUMULATION CAPITAL STOCK COMPONENTS CONSTANT RETURNS TO SCALE CONSUMERS COST OF CAPITAL COUNTRY RISK COUNTRY TO COUNTRY COVARIANCE MATRIX DEVELOPING COUNTRIES DEVELOPING COUNTRY DEVELOPING ECONOMIES DEVELOPMENT ECONOMICS DIVIDEND ECONOMIC ACTIVITY ECONOMIC CRISIS ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC REFORMS EQUILIBRIUM FEDERAL RESERVE FEDERAL RESERVE BANK FINANCIAL SUPPORT GDP GDP PER CAPITA GENERAL EQUILIBRIUM ANALYSIS GOVERNMENT BUDGET GROWTH RATE GROWTH RATES HUMAN CAPITAL INCOME INCOME LEVELS INCOMES INCUMBENT INDEXES INDUSTRIAL COUNTRIES INFORMATION REVOLUTION INFORMATION TECHNOLOGIES INFORMATION TECHNOLOGY INNOVATION INTEREST RATES INTERNATIONAL COMPARISONS INTERNATIONAL TRADE ITC JOB CREATION JUDICIAL SYSTEM LABOR MARKET LEGAL SYSTEM LESS DEVELOPED COUNTRIES LOTTERIES MACROECONOMICS MANUFACTURING MARGINAL PRODUCTIVITY MARGINAL UTILITY MARKET REGULATIONS MONOPOLY NET CAPITAL NETWORKS NEW TECHNOLOGIES NEW TECHNOLOGY OUTPUT GAP OUTPUT GAPS OUTPUT PER CAPITA OUTPUT RATIOS PC PERSONAL COMPUTERS POLITICAL ECONOMY POLITICAL SYSTEM POTENTIAL OUTPUT PRICE CONTROLS PRODUCT MARKETS PRODUCTION FUNCTION PRODUCTION GOODS PRODUCTION INPUTS PRODUCTION PROCESS PRODUCTIVITIES PRODUCTIVITY PRODUCTIVITY GROWTH PROFIT MAXIMIZATION RANDOM WALK RATE OF GROWTH REAL INTEREST RATE RED TAPE REGRESSION ANALYSIS REGULATORY IMPEDIMENTS REGULATORY RESTRICTIONS REPUBLIC RESULT RESULTS SIMULATION STARTUPS TAX TECHNOLOGICAL ADVANCES TECHNOLOGICAL INNOVATION TECHNOLOGICAL INNOVATIONS TELECOMMUNICATIONS THIRD WORLD TOTAL FACTOR PRODUCTIVITY TRANSMISSION TRANSPARENCY TURNOVER UNEMPLOYMENT USERS USES UTILITY FUNCTION UTILITY FUNCTIONS VOLATILITY WAGES WEB WORLD DEVELOPMENT INDICATORS |
| spellingShingle |
ABSTRACTS ADVANCED TECHNOLOGY ALLOCATION ASSET PRICES AUTOMOBILES AVERAGE PRODUCTIVITY BANKRUPTCY BARRIER BASIC BENCHMARK BUREAUCRACY BUSINESS ACTIVITIES BUSINESS CYCLE BUSINESS CYCLES BUSINESS ENTRY BUSINESS INDICATORS BUSINESS REGULATION CAPITAL ACCUMULATION CAPITAL STOCK COMPONENTS CONSTANT RETURNS TO SCALE CONSUMERS COST OF CAPITAL COUNTRY RISK COUNTRY TO COUNTRY COVARIANCE MATRIX DEVELOPING COUNTRIES DEVELOPING COUNTRY DEVELOPING ECONOMIES DEVELOPMENT ECONOMICS DIVIDEND ECONOMIC ACTIVITY ECONOMIC CRISIS ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC REFORMS EQUILIBRIUM FEDERAL RESERVE FEDERAL RESERVE BANK FINANCIAL SUPPORT GDP GDP PER CAPITA GENERAL EQUILIBRIUM ANALYSIS GOVERNMENT BUDGET GROWTH RATE GROWTH RATES HUMAN CAPITAL INCOME INCOME LEVELS INCOMES INCUMBENT INDEXES INDUSTRIAL COUNTRIES INFORMATION REVOLUTION INFORMATION TECHNOLOGIES INFORMATION TECHNOLOGY INNOVATION INTEREST RATES INTERNATIONAL COMPARISONS INTERNATIONAL TRADE ITC JOB CREATION JUDICIAL SYSTEM LABOR MARKET LEGAL SYSTEM LESS DEVELOPED COUNTRIES LOTTERIES MACROECONOMICS MANUFACTURING MARGINAL PRODUCTIVITY MARGINAL UTILITY MARKET REGULATIONS MONOPOLY NET CAPITAL NETWORKS NEW TECHNOLOGIES NEW TECHNOLOGY OUTPUT GAP OUTPUT GAPS OUTPUT PER CAPITA OUTPUT RATIOS PC PERSONAL COMPUTERS POLITICAL ECONOMY POLITICAL SYSTEM POTENTIAL OUTPUT PRICE CONTROLS PRODUCT MARKETS PRODUCTION FUNCTION PRODUCTION GOODS PRODUCTION INPUTS PRODUCTION PROCESS PRODUCTIVITIES PRODUCTIVITY PRODUCTIVITY GROWTH PROFIT MAXIMIZATION RANDOM WALK RATE OF GROWTH REAL INTEREST RATE RED TAPE REGRESSION ANALYSIS REGULATORY IMPEDIMENTS REGULATORY RESTRICTIONS REPUBLIC RESULT RESULTS SIMULATION STARTUPS TAX TECHNOLOGICAL ADVANCES TECHNOLOGICAL INNOVATION TECHNOLOGICAL INNOVATIONS TELECOMMUNICATIONS THIRD WORLD TOTAL FACTOR PRODUCTIVITY TRANSMISSION TRANSPARENCY TURNOVER UNEMPLOYMENT USERS USES UTILITY FUNCTION UTILITY FUNCTIONS VOLATILITY WAGES WEB WORLD DEVELOPMENT INDICATORS Bergoeing, Raphael Loayza, Norman V. Piguillem, Facundo Why Are Developing Countries So Slow in Adopting New Technologies? The Aggregate and Complementary Impact of Micro Distortions |
| geographic_facet |
The World Region The World Region |
| relation |
Policy Research working paper ; no. WPS 5393 |
| description |
This paper explores how developmental
and regulatory impediments to resource reallocation limit
the ability of developing countries to adopt new
technologies. An efficient economy innovates quickly; but
when the economy is unable to redeploy resources away from
inefficient uses, technological adoption becomes sluggish
and growth is reduced. The authors build a model of
heterogeneous firms and idiosyncratic shocks, where
aggregate long-run growth occurs through the adoption of new
technologies, which in turn requires firm destruction and
rebirth. After calibrating the model to leading and
developing economies, the authors analyze its dynamics in
order to clarify the mechanism based on firm renewal. The
analysis uses the steady-state characteristics of the model
to provide an explanation for long-run output gaps between
the United States and a large sample of developing
countries. For the median less-developed country in the
sample, the model accounts for more than 50 percent of the
income gap with respect to the United States, with 60
percent of the simulated gap being explained by
developmental and regulatory barriers taken individually,
and 40 percent by their interaction. Thus, the benefits from
market reforms are largely diminished if developmental and
regulatory distortions to firm dynamics are not jointly addressed. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Bergoeing, Raphael Loayza, Norman V. Piguillem, Facundo |
| author_facet |
Bergoeing, Raphael Loayza, Norman V. Piguillem, Facundo |
| author_sort |
Bergoeing, Raphael |
| title |
Why Are Developing Countries So Slow in Adopting New Technologies? The Aggregate and Complementary Impact of Micro Distortions |
| title_short |
Why Are Developing Countries So Slow in Adopting New Technologies? The Aggregate and Complementary Impact of Micro Distortions |
| title_full |
Why Are Developing Countries So Slow in Adopting New Technologies? The Aggregate and Complementary Impact of Micro Distortions |
| title_fullStr |
Why Are Developing Countries So Slow in Adopting New Technologies? The Aggregate and Complementary Impact of Micro Distortions |
| title_full_unstemmed |
Why Are Developing Countries So Slow in Adopting New Technologies? The Aggregate and Complementary Impact of Micro Distortions |
| title_sort |
why are developing countries so slow in adopting new technologies? the aggregate and complementary impact of micro distortions |
| publishDate |
2012 |
| url |
http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20100803112829 http://hdl.handle.net/10986/3877 |
| _version_ |
1764388797207805952 |