PRODUCT AND PROCESS INNOVATION IN THE PRODUCT LIFE-CYCLE - ESTIMATES FOR US MANUFACTURING-INDUSTRIES

Few direct tests of the empirical power of product-cycle models have been conducted. The paper begins with a simple product-cycle model that predicts the impact of product- and process-oriented innovations on prices, wages, sales, and exports: and then estimates these predictions using data for 11 two-digit manufacturing industries in the US during the period from 1974 to 1988. The distinction between product- and process-oriented technological change is important because it yields predictions that aid in assessing the power of the product-cycle models. Most empirical studies aggregate product- and process-oriented technological change. -from Authors