Technological frontiers and competition in multi-technology sectors. Micro-evidence from the aero-engine industry

This paper aims to investigate some conceptual and methodological issues on the measurement of technological change in multi-technology product sectors. It develops a methodological contribution by building a measure of the technological frontier and of firms’ technological positioning based on multiple technical characteristics by using Data Envelopment Analysis (DEA) techniques. The methodology is applied to the study of the technological evolution and competition in the commercial jet aero-engine industry from 1958 to 1997. The empirical analysis shows that: the overall evolution is characterised by technological discontinuities, followed by incremental developments; there is convergence on the technological frontier by all competitors; at the same time, there is persistence of less efficient products over time.