Article | Review of Economics and Statistics | May 2009

Lobbies and Technology Diffusion

by Diego Comin and Bart Hobijn

Abstract

This paper explores whether lobbies slow down technology diffusion. To answer this question, we exploit the differential effect of various institutional attributes that should affect the costs of erecting barriers when the new technology has a technologically close predecessor but not otherwise. We implement this test using a data set that covers the diffusion of 20 technologies for 23 countries over the past two centuries. We find that each of the relevant institutional variables that affect the costs of erecting barriers has a significantly larger effect on the diffusion of technologies with a competing predecessor technology than when no such technology exists. These effects are quantitatively important. Thus, we conclude that lobbies are an important barrier to technology adoption and to development.

Keywords: Technology Adoption; Cost; Problems and Challenges; Knowledge Dissemination; Competition;

Citation:

Comin, Diego, and Bart Hobijn. "Lobbies and Technology Diffusion." Review of Economics and Statistics 91, no. 2 (May 2009): 229–244.