Download This PaperEndogenous Technology Adoption, Government Policy and Tariffication
23 Pages Posted: 30 Aug 2006
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: Suggested Citation
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