Technological change, learning, and institutional adjustment

As a primary research challenge, this dissertation explores the relationship between innovations and institutional adjustments, and in particular, focuses upon the role of the nature of technological change in determining the patterns of institutional responses, which are outlined in detail in Chapter 1.; Chapter 2 studies technology transfer processes in Japan's chemical industry and proposes the argument that its unique mode of technology transfer has served to accelerate the learning of existing foreign technologies, yet has failed to provide inventive capabilities due to local spillover, a proposition that is referred to as a paradox of technology transfer. Then, Chapter 3 offers a formalization of the consequences of this local spillover in a simple general equilibrium model, thereby revealing new policy implications. The basic idea in this third chapter involves the control of one of the system parameters as representative of the underlying structure of an economy. Under certain conditions, it is demonstrated that the convergence of multiple equilibria can be achieved, maximizing social welfare in the process.; In Chapters 4 and 5, the issues proposed study the effects of the nature of technological change on institutional adjustments through a consideration of the contractual patterns that are generally observed in the Japanese chemical engineering industry. As for Chapter 4, the emphasis highlights a trade-off between static efficiency minimizing transaction costs through long-term relationships and dynamic efficiency utilizing the latest technology that users are confronted by in terms of selecting suppliers. A simple model is proposed to exemplify that the nature of technological change determines the degree of this crucial trade-off. On the other hand, Chapter 5 considers the make-or-buy problems of these contracts themselves. By incorporating new assumptions of sunk investments and recurrent technological uncertainty, a band of hysteresis emerges within which the optimal institutional choice critically depends upon history rather than upon asset specificity.; Finally, Chapter 6 concludes this dissertation with the following implications: (1) learning constitutes economic behavior and relies upon a path-dependent process; (2) both history and the nature of technological change critically influence this learning process.