Cyanide on the Rand: Competing Methods of Technology Transfer

Abstract

We study technology diffusion mechanisms using a unique historical setting: the introduction of the cyanide method of gold extraction on the Witwatersrand goldfields in the late 19th and early 20th centuries. Mines managed by the same mining house were more likely to adopt the new process, which increased extraction rates by around 50%. Cyanide technology was continually improved after its introduction. We find evidence of knowledge spillovers from engineers and mine managers but not white-collar employees. Geographical spillovers are extremely localized in nature.

Keywords: Productivity, Innovation, Technology Spillover, Network Effects

JEL Classification: O31