Does productivity growth fall after the adoption of new technology?

A number of theoretical models of technology adoption have been proposed that imply that measured productivity growth may initially fall and then later rise after the adoption of a new technology. This paper investigates whether or not this implication is a feature of plant-level data from the Colombian manufacturing sector. We focus on technology adoption embodied in new equipment. We find evidence that the effect of a large equipment purchase is initially to reduce plant-level total factor productivity growth. (C) 2001 Elsevier Science B.V. All rights reserved.