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Adoption of advanced manufacturing technology and firm performance in the Netherlands

Abstract

This paper presents characteristics of firms which employ advanced manufacturing tech-nology (AMT), explores the pattern of adoption of such technology, and traces the effects ofadoption on the evolution of employment and productivity. The study uses linked firm-leveldata on production, factor inputs and on advanced manufacturing technology. It is foundthat the percentage of firms which employ advanced technology increases with higher laborproductivity, higher export-sales ratios, and especially larger firm size. Corrected for interac-tions, however, only initial size and the capital-labor ratio in 1985 aid in predicting adoptionof AMT. Conditional on adoption of AMT it is seen that intensity of advanced technologyinputs decrease with firm size and with labor productivity. Finally, firms which employedAMT in 1992 show higher average growth rates of employment and of the capital-labor ratiobetween 1985 and 1991

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