Competitive Pressure and Technology Adoption: Evidence from a Policy Reform in Western Canada
29 Pages Posted: 4 Jun 2013 Last revised: 17 Jul 2014
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Competitive Pressure and Technology Adoption: Evidence from a Policy Reform in Western Canada
Competitive Pressure and Technology Adoption: Evidence from a Policy Reform in Western Canada
Date Written: April 1, 2013
Abstract
We measure the impact of the removal of a railway transportation subsidy on the adoption of technology for Western Canadian farms, using a unique combination of Census and freight rate data. We exploit the large regional variation in these one-time freight rate increases in order to identify causal effects of increased competitive pressure. Using a difference-in-differences methodology we find that higher freights rates – and hence lower farm gate prices – induced farmers to adopt new, more efficient production technology. We also find that farmers experiencing the greatest transportation cost increases also increased fertilizer usage and made significant land use changes.
Keywords: Agricultural Trade Liberalization, Export Subsidy, Technical Change
JEL Classification: F14, O13, Q16, Q17, Q18
Suggested Citation: Suggested Citation
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