Original scientific paper
https://doi.org/10.1080/1331677X.2021.1975148
An empirical study on the endogeneity of directed technical change in China
Huihui Liu
Hao Liu
Abstract
Research on the endogeneity of directed technical change is very
interesting and meaningful. If the direction of technical change is
endogenous, policy makers can adjust the technical change value
of factors according to specific purpose. We establish a theoretical
model of the direction of technical change, relative price of factors and international trade under nested and non-nested CES
production functions. We use mature measurement methods such
as the unit root test and cointegration analysis to test the theoretical model in practice. We find that the direction of technical
change is endogenous in China. The change in the relative price
of factors in China causes a technical change in the same direction. Meanwhile, international trade intensifies and accelerates the
labour augmenting technical change, but blocks the pace of capital augmenting technical change. Under a substitution elasticity
of less than one, technical change is biased toward energy and
capital in China, and this bias is brought about by the decrease in
their relative price and international trade.
Keywords
Direction of technological progress; biased technical change; augmenting technical change; relative price of factors; international trade; empirical analysis
Hrčak ID:
302474
URI
Publication date:
31.3.2023.
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