Verification of technical change and cost and productivity criteria: An empirical study using the World Input–Output Database

Abstract

This study examines the different types of technical change, as categorized by the productivity and cost criteria proposed by previous theoretical studies using data from the World Input–Output Database. The results confirm that in some sectors, the cost criteria are satisfied, but the productivity criteria are not. These technological changes are due to the very large labor input of imported intermediates and the higher monetary wage rate of the recipient country than that of the country supplying the imported intermediates. This study is a valid objection to previous theoretical studies.