The effects of disruptive innovations on productivity

Abstract

• From macroeconomic perspective, the disruptive innovations modify the productivity. • The standard measure of TFP does not consider the effects of disruptive innovations. • The effects of disruptive innovations on TFP are the crowding-out and substitution. • The effects of disruptive innovations impact differently between countries and time. • The crowding-out effect is almost always more relevant than the substitution effect.