Demand-driven Technical Change and Productivity Growth: Theory and Evidence from the Energy Policy Act

Impullitti, Giammario; Kneller, Richard; McGowan, Danny

Abstract

We present novel evidence on the effect of market size on technology adoption and productivity. Our tests exploit a natural experiment in the US corn industry where changes to national energy policy created exogenous increases in demand. Difference-in-difference estimates show that the demand shock caused technical change as corn producers adopted higher quality seeds which in turn raised productivity by 7%. We develop a simple model that formalizes the mechanisms underlying our results.

Citation

Impullitti, G., Kneller, R., & McGowan, D. (2020). Demand-driven Technical Change and Productivity Growth: Theory and Evidence from the Energy Policy Act. Journal of Industrial Economics, 68(2), 328-363. https://doi.org/10.1111/joie.12231

• Journal Article Type: Article
• Acceptance Date: Jul 28, 2019
• Online Publication Date: Jul 29, 2020
• Publication Date: 2020-06
• Deposit Date: Aug 14, 2019
• Publicly Available Date: Jul 1, 2022
• Journal: Journal of Industrial Economics
• Print ISSN: 0022-1821
• Electronic ISSN: 1467-6451
• Publisher: Wiley
• Peer Reviewed: Peer Reviewed
• Volume: 68
• Issue: 2
• Pages: 328-363
• DOI: https://doi.org/10.1111/joie.12231
• Keywords: Demand; Market size; Technical change; Productivity
• Public URL: https://nottingham-repository.worktribe.com/output/2427513
• Publisher URL: https://onlinelibrary.wiley.com/doi/10.1111/joie.12231