Diffusion performance of major steel-making countries: alternative econometric tests

The purpose of this study is to compare the speed of diffusion in major steel-making countries. This is a cross-system analysis, involving industrial market countries (Western Europe, the United States, Canada, and Japan), quasi-market economies (selected newly industrializing countries, India), and the central planning states (the Soviet Union and Eastern Europe). The study reveals that at least in this, significant case, the latter countries are clearly inferior, i.e. slower.The article seeks the most accurate measure of speed of diffusion of one radical steel innovation, the oxygen process. The speed is estimated by regressing a logistic function not applied to the steel industry to date. Parameters of a logistic function are estimated first with linear least squares methods and then with nonlinear (or iterative) least squares, to establish which offers more accurate estimation than the widely used linear approach. It is shown that the iterative method produces a better statistical fit.Associate Professor; the author would like to acknowledge computational assistance by Steve Langolis, Stanford University, and help in updating the author's data on the world steel production provided by Mark Shafter, London School of Economics.     

Introduction

Kazimierz Poznanski is with The Henry M. Jackson School of International Affairs, University of Washington, Seattle, WA 98195, U.S.A.     

International diffusion of steel technologies: Time-lag and the speed of diffusion

The article deals with the diffusion of two major innovations in the world's steel industry, the oxygen steel process and continuous casting. Twenty-one countries, including the socialist countries of Eastern Europe, are analyzed from the point of view of their ability to adopt technology from pioneering countries. Among capitalist countries, Great Britain and the United States appear to be slower than others. Eastern European countries and the Soviet Union as a group show a lower ability to adopt technologies than capitalist countries, even the slowest ones. G. Ray's hypothesis that countries that are late-comers in adopting a particular technology benefit from that and are faster in spreading it over their industry is challenged. The correlation analysis shows that at least in one case, the oxygen steel process, the late-comers are not faster in diffusion than countries that were first in introducing new technology. It is concluded from empirical findings that late-comers may not be faster in diffusion if there is a lack of good communication (the Eastern European countries case) or when the technology in question is relatively simple and benefits from being late are insignificant (the case of oxygen steel process).     

Consumer prices and private consumption in Poland and Austria

Starting from a bilateral comparison of consumption levels in Poland and Austria in 1964, 1973, and 1978, the authors calculate the implicit price indexes for both countries. The confrontation of the implicit and official price indexes seems to prove that official data grossly understate price inflation and overstate real growth of consumption in Poland. The causes of this discrepancy are mainly seen in the systemic difficulty of properly measuring price changes in Poland's “shortage economy.” This problem may arise in all international comparison between centrally planned and market economies when official price indices are used.     

The CPE Aversion to Innovations: Alternative theoretical explanations

Conclusions Three competing theoretical approaches address the factors determining the low technological capability of the CPEs. One, here called the risk-reward explanation, focuses on the excessive riskiness of innovation to enterprises or the lack of sufficient rewards for taking on additional risk. Another theory, called the zero-price explanation, links their lackluster technological performance to the state's willingness to rescue failing enterprises. Finally, the closed-economy explanation relates the CPEs' incapacity to the autarkic nature of CPE systems.If one restricts discussion to internal matters, the zero price theory appears to be the most plausible. Where a permissive state offers help to any unfortunate or mismanaged enterprise, this weakens interest in efficiency and in pursuing innovations whose purpose is to economize on resources. The risk-reward explanation loses force if one assumes the presence of a permissive (or paternalistic) state because it implies little real risk for managers, which makes the size of rewards for innovative actions rather irrelevant.However, one can scarcely be satisfied with a discussion of the factors behind the lackluster performance of the CPEs that remains within the framework of a national economy. Technological changes in contemporary economies are highly international, so that developments in one country are very dependent on those occurring elsewhere. Therefore, what most undermines the CPEs' efforts is their limited degree of openness to the world market, which reduces enterprises' exposure to foreign competition and limits the inflow of foreign direct investment. Unfortunately, this closedness is not compensated for by their extensive—but bureaucratized—trade with one another in the CMEA.Parts of this article have been presented in Poznanski (1987). The author has benefited from comments by Irena Grosfeld.     

Rezensionen

Ohne Zusammenfassung