Lashkari, Danial Bauer, Arthur and Boussard, Jocelyn
Information technology and returns to scale - The American Economic Review - 114(6),Jun, 2024: p.1769-1815
What are the implications of the dramatic fall in IT prices for aggregate technology? When firm-level technologies are continuously differentiable, a factor price shock leads to (i) a substitution between factors and/or (ii) an endogenous response of returns to scale. The second channel is governed by the output elasticity of relative factor demand. Using detailed firm-level data from France, we estimate this elasticity to be positive for IT factor demand. A quantitative exercise accounting for both technological channels shows that falling IT prices can explain much of the changes in concentration and the composition of aggregate labor share in France.- Reproduced
https://www.aeaweb.org/articles?id=10.1257/aer.20220522
Information technology and returns to scale - The American Economic Review - 114(6),Jun, 2024: p.1769-1815
What are the implications of the dramatic fall in IT prices for aggregate technology? When firm-level technologies are continuously differentiable, a factor price shock leads to (i) a substitution between factors and/or (ii) an endogenous response of returns to scale. The second channel is governed by the output elasticity of relative factor demand. Using detailed firm-level data from France, we estimate this elasticity to be positive for IT factor demand. A quantitative exercise accounting for both technological channels shows that falling IT prices can explain much of the changes in concentration and the composition of aggregate labor share in France.- Reproduced
https://www.aeaweb.org/articles?id=10.1257/aer.20220522