Speaker(s): Daniel Snow (Berkeley) --- Recruiting Candidate
Title:
Abstract
Technologies
often experience a period of extraordinary improvement or a “last gasp”
before being superseded by new technologies. The standard explanation for this
last gasp is that adherents of threatened technologies try harder to improve
their technology after the threat from a new technology materializes. Although
this phenomenon should inform the study of technological transitions in general
and firms’ technology policy decisions in particular, the “trying harder”
explanation has not been tested against alternative explanations. In this paper,
I develop and test two new explanations for last gasps. The first, a selection
effect, is that new technologies force old technologies out of inefficient
applications, making them appear to be more efficient on average. The second is
that entrant technologies sometimes introduce efficiency-enhancing component
technologies that may be “spilled over” to incumbent technologies. To test
these and the trying harder explanation, I use two datasets. First, I construct
an original dataset covering the last gasp of carburetor efficiency which
occurred during the 1980s when a substitute technology, Electronic Fuel
Injection (EFI), entered the market. The second is data from the US Patent and
Trademark Office. I find that the carburetor’s last gasp was caused by the
selection effect and by the spillover of electronic control technology from
Electronic Fuel Injection to carburetors. Significantly, however, only those
carburetor firms that also manufactured EFI were able to capture the benefits of
these spillovers, a result consistent with the “Absorptive Capacity” theory.
Old-technology carburetors built by threatened firms experienced an unexplained
increase in efficiency.
CV (pdf)