Market structure, factor endowment, and technology adoption

This paper investigates how technology adoption depends on factor endowment when new, capital-intensive technology is privately accessible. The non-competitive market structure is shown to indirectly distort factor prices in general equilibrium, resulting in a nonmonotonic capital endowment impact on static allocation efficiency and the dynamic pattern of industrial upgrading. Moreover, an increase in the initial capital endowment may delay rather than facilitate the adoption of capital-intensive technology. Private accessibility to the new technology may also result in premature adoption, overutilization, and multiple equilibria. Welfare-enhancing policies are discussed.