International Economics Seminar Series

 

Amit Khandelwal

Associate Professor of Business

Columbia University

 

 

Amit Khandelwal will be presenting his paper, “Organizational Barriers to Technology Adoption:  Evidence from Soccer-Ball Producers in Pakistan” at 3:30 pm today in the Volanakis Faculty Lounge (Buchanan 051).  Light refreshments will be served. A copy of his paper is attached; paper copies will be available at the seminar.

 

 

 

 

Abstract

 

 

 

This paper studies technology adoption in a cluster of soccer-ball producers in Sialkot, Pakistan. Our research team invented a new cutting technology that reduces waste of the primary raw material. We allocated the technology to a random subset of producers. Despite the arguably unambiguous net benefits of the technology, after 15 months take-up remained puzzlingly low. We hypothesize that a key reason for the lack of adoption is a misalignment of incentives within firms: the key employees (cutters and printers) are typically paid piece rates, with no incentive to reduce waste, and the new technology slows them down, at least initially. Fearing reductions in their effective wage, employees resist adoption in various ways, including by misinforming owners about the value of the technology. To investigate this hypothesis, we implemented a second experiment among the firms to which we originally gave the technology: we offered one cutter and one printer per firm a lump-sum payment, approximately equal to a monthly wage, to demonstrate competence in using the technology in the presence of the owner. This incentive payment, small from the point of view of the firm, had a significant positive effect on adoption. We interpret the results as supportive of the hypothesis that misalignment of incentives within firms is an important barrier to technology adoption in our setting.

 

 

Please let me know if you have any questions.

Rick Rielly, 646-0163

 

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