Technological convergence and the connections between adoption, maintenance and investment activities
This paper explores the interactions between maintenance, adoption and investment activities when labor is heterogeneous. We consider that adoption activities are intensive in human capital whereas capital maintenance requires unskilled labor. Among the main results, we find that the optimal skilled and unskilled labor allocation are independently determined. Hence, maintenance (adoption) activities are not affected by changes in the efficiency of adoption (maintenance) parameters. We next simulate the model in order to study the convergence speed to the long run technological gap and the role of human capital in the process of catching-up.
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