Contracts and Technology Adoption

DSpace/Manakin Repository

Contracts and Technology Adoption

Citable link to this page


Title: Contracts and Technology Adoption
Author: Acemoglu, Daron; Antras, Pol; Helpman, Elhanan

Note: Order does not necessarily reflect citation order of authors.

Citation: Acemoglu, Daron, Pol Antras, and Elhanan Helpman. 2007. Contracts and technology adoption. American Economic Review 97(3): 916-943.
Full Text & Related Files:
Abstract: We develop a tractable framework for the analysis of the relationship between contractual incompleteness, technological complementarities, and technology adoption. In our model, a firm chooses its technology and investment levels in contractible activities by suppliers of intermediate inputs. Suppliers then choose investments in noncontractible activities, anticipating payoffs from an ex post bargaining game. We show that greater contractual incompleteness leads to the adoption of less advanced technologies, and that the impact of contractual incompleteness is more pronounced when there is greater complementary among the intermediate inputs. We study a number of applications of the main framework and show that the mechanism proposed in the paper can generate sizable productivity differences across countries with different contracting institutions, and that differences in contracting institutions lead to endogenous comparative advantage differences.
Published Version:
Terms of Use: This article is made available under the terms and conditions applicable to Other Posted Material, as set forth at
Citable link to this page:
Downloads of this work:

Show full Dublin Core record

This item appears in the following Collection(s)


Search DASH

Advanced Search