Competitive Pressure and Technology Adoption: Evidence from a Policy Reform in Western Canada

25 Pages Posted: 15 Apr 2020

See all articles by Shon M. Ferguson

Shon M. Ferguson

Swedish University of Agricultural Sciences (SLU) - Department of Economics; Research Institute of Industrial Economics (IFN)

M. Rose Olfert

University of Saskatchewan - College of Agriculture - Agricultural Economics

Multiple version iconThere are 2 versions of this paper

Date Written: March 2016

Abstract

We estimate the impact that removing a railway transportation subsidy has on the adoption of production technology for Western Canadian farms by using a unique combination of census and freight rate data. We exploit the large regional variation in these one‐time freight rate increases to identify causal effects of increased competitive pressure. Using a difference‐in‐differences methodology, we find that higher freight 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 their fertilizer usage and made significant land use changes.

Keywords: Agricultural trade liberalization, export subsidy, technical change

Suggested Citation

Ferguson, Shon M. and Olfert, M. Rose, Competitive Pressure and Technology Adoption: Evidence from a Policy Reform in Western Canada (March 2016). American Journal of Agricultural Economics, Vol. 98, Issue 2, pp. 422-446, 2016, Available at SSRN: https://ssrn.com/abstract=3574922 or http://dx.doi.org/10.1093/ajae/aav018

Shon M. Ferguson (Contact Author)

Swedish University of Agricultural Sciences (SLU) - Department of Economics

Box 7013
Ulls hus, Ulls väg 27
Uppsala, 750 07
Sweden

Research Institute of Industrial Economics (IFN) ( email )

Box 55665
Grevgatan 34, 2nd floor
Stockholm, SE-102 15
Sweden

M. Rose Olfert

University of Saskatchewan - College of Agriculture - Agricultural Economics ( email )

51 Campus Drive
Saskatoon, SK S7N 5A8
Canada

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
0
Abstract Views
96
PlumX Metrics