Behavior of technology in reducing prices of innovative goods - an analysis of the governing factors of variance of PV module prices

摘要

Classical growth accounting theory suggests that technological innovation leads to a price decrease. Technology diffusion theory states that technology diffuses into a market place in an epidemic manner and is incorporated into production factors and innovative goods. In addition, learning theory suggests that the learning exercise results in a price decrease. Even though these theories work with overlapping processes no significant work has yet to be undertaken to bridge these three theoretical frameworks. Consequently, the behavior of technology in reducing the prices of innovative goods remains a 'black box.' This paper attempts to elucidate this black box by unraveling this mechanism. An empirical analysis across a distribution of 639 PY module prices in Japan's leading PV firms is introduced and the mechanism of technology contribution to decreasing these prices is identified.