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To link to full-text access for this article, visit this link: http://dx.doi.org/10.1016/j.worlddev.2006.03.004 Byline: Michiel van Dijk, Adam Szirmai Keywords: Asia; Indonesia; pulp and paper industry; technology diffusion; technology adoption; industrial policy; machine index Abstract: In this paper, we analyze the diffusion and adoption of paper making machinery in the Indonesian pulp and paper industry, from 1923 till 2000. We develop a machine level index of technological sophistication (mach), which measures the technological distance of each paper machine to the world technological frontier. The data reveal a pattern of rapid technological catch up. But catch up was not an industrywide phenomenon. Some modern firms installed state-of-the-art machinery, while others installed older vintages. The paper argues that industrial policy has played an important role in the speed and nature of diffusion of paper making machinery. Author Affiliation: Eindhoven University of Technology, The Netherlands Article History: Accepted 13 March 2006

In this paper, we analyze the diffusion and adoption of paper making machinery in the Indonesian pulp and paper industry, from 1923 till 2000. We develop a machine level index of technological sophistication (math), which measures the technological distance of each paper machine to the world technological frontier. The data reveal a pattern of rapid technological catch up. But catch up was not an industrywide phenomenon. Some modern firms installed state-of-the-art machinery, while others installed older vintages. The paper argues that industrial policy has played an important role in the speed and nature of diffusion of paper making machinery. Key words--Asia, Indonesia, pulp and paper industry, technology diffusion, technology adoption, industrial policy, machine index