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The role of risk and institutions in the adoption and diffusion of technologies: Evidence from Sub-Saharan Africa

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  • Asif, Zainab
  • Chinzara, Zivanemoyo
  • Lahiri, Radhika

Abstract

The aim of this paper is to examine the impact of risk, adoption costs and institutional development on the diffusion of technology. We take a comprehensive approach to examining this link, using a multi-sectoral approach that considers a wide variety of technologies. Using recently developed and more appropriate measures of diffusion, we find the impact of risk and other barriers is relatively weak in contrast to previous literature. Further, it is technology-specific and conditional on institutional development. There is a threshold level of development beyond which countries experience faster technological diffusion, but this is not universally the case. Particularly, for newly invented technologies in the information and communication sector, diffusion occurs faster in less developed countries. A key finding pertains to the learning-by-doing aspect of diffusion suggesting that technology-specific human capital development should complement reforms aimed at improving technological diffusion.

Suggested Citation

  • Asif, Zainab & Chinzara, Zivanemoyo & Lahiri, Radhika, 2023. "The role of risk and institutions in the adoption and diffusion of technologies: Evidence from Sub-Saharan Africa," Economic Analysis and Policy, Elsevier, vol. 77(C), pages 16-33.
    • Handle: RePEc:eee:ecanpo:v:77:y:2023:i:c:p:16-33
    DOI: 10.1016/j.eap.2022.10.015
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    More about this item

    Keywords

    Development; GMM model; Institutions; Technological diffusion; Risk;
    All these keywords.

    JEL classification:

    • F3 - International Economics - - International Finance
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology

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