The effects of new technology on productivity: technological improvement and reallocation efficiency in the Japanese steelmaking industry

Abstract This paper analyzes the effect of new technology for steel refining—the basic oxygen furnace—on productivity growth using decomposition method. I employ a technique that decomposes into four factors: operational improvement, within- and between-technology reallocation, entry–exit effects. demonstrate following two factors are both substantially important: (i) rapid progress (ii) reallocation among existing furnaces through entries. also find although overall allocation efficiency improved, within-new-technology declined. The results suggest government policies encouraged construction by lowering cost introducing technology, firms were able to enjoy high gains from itself its growth.