Endogenous Technology Adoption, Government Policy and Tariffication

23 Pages Posted: 30 Aug 2006

See all articles by Josh Ederington

Josh Ederington

University of Kentucky - Department of Economics

Phillip McCalman

University of California, Santa Cruz - Department of Economics

Date Written: January 2006

Abstract

In this paper we integrate government policy into game-theoretic models of endogenous technology adoption to investigate the impact of alternate policy instruments on the adoption of productivity-improving technologies. We show that while ad-valorem taxes have a neutral impact on technology adoption, specific taxes tend to decrease the speed of technology diffusion. As an application of this finding we demonstrate how, in an open-economy setting, tariffication (i.e., the conversion of quotas to ad-valorem tariffs) can lead to faster technology adoption world-wide.

Keywords: Technology Adoption, Specific tax, Ad valorem tax, tariffs, quotas

JEL Classification: F12, F13, F15, H2

Suggested Citation

Ederington, Josh and McCalman, Phillip, Endogenous Technology Adoption, Government Policy and Tariffication (January 2006). Available at SSRN: https://ssrn.com/abstract=927450 or http://dx.doi.org/10.2139/ssrn.927450

Josh Ederington (Contact Author)

University of Kentucky - Department of Economics ( email )

335 Business and Economics Building
Lexington, KY 40506
United States

Phillip McCalman

University of California, Santa Cruz - Department of Economics ( email )

Santa Cruz, CA 95064
United States
(831) 459-4381 (Phone)
(831) 459-5900 (Fax)

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