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Technology adoption in response to changes in market conditions: Evidence from the US petroleum refining industry


  • Ming-yuan Chen


This paper analyzes the determinants of the levels and rates of technology adoption for petroleum refineries that survived the period 1980-1989, during which the conditions of product demand and crude oil supply changed significantly. Regression models are specified to investigate the growth of technology-related capacity, the growth of technology complexity, and the rates of adoption estimated from a diffuse model of technology use. Both levels and rates of adoption are hypothesized to be affected by refinery size, regulatory status, elements of local markets, and geographical factors. Empirical results generally suggest that compared with the supply-side factors of crude oil sources and regulatory subsidies, refinery size and demand-side factors, such as total consumption, consumption growth and fluctuation, and changes of the consumption mix, are responsible for the most part of the determination of technology adoption for refineries surviving the 1980s.

Suggested Citation

  • Ming-yuan Chen, 2005. "Technology adoption in response to changes in market conditions: Evidence from the US petroleum refining industry," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 14(8), pages 735-756.
  • Handle: RePEc:taf:ecinnt:v:14:y:2005:i:8:p:735-756
    DOI: 10.1080/10438590500117487

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    References listed on IDEAS

    1. Michael H. Riordan, 1992. "Regulation and Preemptive Technology Adoption," RAND Journal of Economics, The RAND Corporation, vol. 23(3), pages 334-349, Autumn.
    2. Labson, B Stephen & Gooday, Peter, 1994. "Factors influencing the diffusion of electric arc furnace steelmaking technology," MPRA Paper 70666, University Library of Munich, Germany.
    3. Colombo, Massimo G & Mosconi, Rocco, 1995. "Complementarity and Cumulative Learning Effects in the Early Diffusion of Multiple Technologies," Journal of Industrial Economics, Wiley Blackwell, vol. 43(1), pages 13-48, March.
    4. Lambson, V.E., 1989. "Industry Evolution With Sunk Costs And Uncertian Market Conditions," Working papers 8904, Wisconsin Madison - Social Systems.
    5. Baptista, Rui, 2000. "Do innovations diffuse faster within geographical clusters?," International Journal of Industrial Organization, Elsevier, vol. 18(3), pages 515-535, April.
    6. Moulton, Brent R, 1990. "An Illustration of a Pitfall in Estimating the Effects of Aggregate Variables on Micro Unit," The Review of Economics and Statistics, MIT Press, vol. 72(2), pages 334-338, May.
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    Cited by:

    1. Adriana Fernandez & Robert W. Gilmer & Jonathan Story, 2007. "Gasoline content regulation as a trade barrier: do boutique fuels discourage fuel imports?," Working Papers 0709, Federal Reserve Bank of Dallas.


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