The Impact of Process Innovation on Prices: Evidence from Automated Fuel Retailing in the Netherlands

38 Pages Posted: 15 May 2017

Date Written: May 10, 2017

Abstract

In the last decade, many European countries have seen a sharp increase in the number of automated fueling stations. We study the effect of this process innovation on prices at stations that are automated and their competitors using a difference-in-differences matching strategy. Our estimates show that prices at automated stations drop by 1.0 to 2.1% immediately after conversion and stabilize at this lower level. We find no indication of competitive spillover effects to neighboring sites at the conventional significance levels. Other than previous studies, our estimates do not reveal a difference in impact between early and later adopters of automation.

Keywords: technology adoption, retail gasoline, pricing, competition

JEL Classification: C22, D4, L13, L81

Suggested Citation

Soetevent, Adriaan R. and Bružikas, Tadas, The Impact of Process Innovation on Prices: Evidence from Automated Fuel Retailing in the Netherlands (May 10, 2017). Available at SSRN: https://ssrn.com/abstract=2968348 or http://dx.doi.org/10.2139/ssrn.2968348

Adriaan R. Soetevent (Contact Author)

University of Groningen ( email )

P.O. Box 800
9700 AV Groningen
Netherlands
++ 31 50 363 7018 (Phone)

HOME PAGE: http://www.soetevent.com

Tadas Bružikas

University of Groningen ( email )

P.O. Box 800
9700 AH Groningen, Groningen 9700 AV
Netherlands

HOME PAGE: http://sites.google.com/site/tadasbruzikas/

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