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| Author: | Jovanovic, B. Stolyarov, D. |
| Title: | Optimal adoption of complementary technologies |
| Journal: | American Economic Review
2000 : MAR, VOL. 90:1, p. 15-29 |
| Index terms: | ECONOMICS TECHNOLOGY USA |
| Language: | eng |
| Abstract: | When a production process requires two extremely complementary inputs, conventional wisdom holds that a firm would always upgrade them simultaneously. The authors show, however, that if upgrading each input involves a fixed cost, the firm may upgrade them at different dates, 'asynchronously'. This insight helps understand why productivity rises with the age of a plant, why investment in structures is more spiked than equipment investment, and why plants have spare capacity. |
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