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

Impullitti, Giammario; Kneller, Richard; McGowan, Danny

Authors

Danny McGowan



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.

Journal Article Type Article
Publication Date 2020-06
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
APA6 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
DOI https://doi.org/10.1111/joie.12231
Keywords Demand; Market size; Technical change; Productivity
Publisher URL https://onlinelibrary.wiley.com/doi/10.1111/joie.12231

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