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Endogenous Technology Adoption, Government Policy and Tariffication

Josh Ederington
University of Kentucky - Department of Economics

Phillip McCalman
University of California, Santa Cruz - Department of Economics

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 Classifications: F12, F13, F15, H2

Working Paper Series

Date posted: August 30, 2006 ; Last revised: August 20, 2009

Suggested Citation

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

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Contact Information

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)

Abstract

References (23)

Date posted: August 30, 2006 ; Last revised: August 20, 2009

Suggested Citation

Contact Information

Josh Ederington (Contact Author)

Phillip McCalman