Technological Diversification

Technological Diversification

Technological Diversification ∗

Why is GDP so much more volatile in poor countries than in rich ones? To answer this question, we propose a theory of technological diversification. Production makes use of different input varieties, which are subject to imperfectly correlated shocks. Technological progress takes the form of an increase in the number of varieties, raising average productivity. In addition, the expansion in the ...

551 “Technological diversification” by

Economies at early stages of development are often shaken by abrupt changes in growth rates, whereas in advanced economies growth rates tend to be relatively stable. To explain this pattern, we propose a theory of technological diversification. Production makes use of different input varieties, which are subject to imperfectly correlated shocks. Technological progress takes the form of an incre...

Technological diversification and innovation performance

This paper analyzes the impact of technological diversity on innovation inputs and success using Swiss firm-level panel data. While we do not find any impact of diversity on R&D intensity, we confirm a positive impact of diversity on patent applications as suggested by the literature. However, since patent applications reflect an intermediate innovation input rather than output, we extend the a...

Technological Specialization and Corporate Diversification∗

We document a trend towards fewer and more-focused conglomerates, and develop a model that explains these patterns based on increasing technological specialization. In the model, diversification adds value by allowing efficient within-firm resource reallocation. However, synergies decrease with technological specialization, leading to fewer diversified firms over time. Also, the optimal level o...