Technology Adoption and Market Allocation:The Case of Robotic Surgery

Horn, Danea; Sacarny, Adam; Zhou, R. Annetta

doi:10.2139/ssrn.3931825

Cited by 2 publications

(1 citation statement)

References 21 publications

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“…Generally, the objective of policymakers is to create a market structure that boosts innovation and adoption of innovative technologies. However, while a few studies illustrate the existence of correlation between innovation on market structure (e.g., Olmstead-Rumsey, 2020, Horn et al, 2021, the causal effects of innovation on competition are not well understood. On the one hand, innovative industries drive the growth of advanced economies (e.g., Oliner and Sichel, 2000, Jorgenson et al, 2005, Bloom et al, 2012, Syverson, 2011, Graetz and Michaels, 2018.…”

Section: Introductionmentioning

confidence: 99%

Innovation Begets Innovation and Concentration: The Case of Upstream Oil & Gas in the North Sea

Fioretti¹,

Iaria²,

Janssen³

et al. 2022

Preprint

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We investigate the effect of technology adoption on competition by leveraging a unique dataset on production, costs, and asset characteristics for North Sea upstream oil & gas companies. Relying on heterogeneity in the geological suitability of fields and a landmark decision of the Norwegian Supreme Court that increased the returns of capital investment in Norway relative to the UK, we show that technology adoption increases market concentration. Firms with prior technology-specific know-how specialize more in fields suitable for the same technology but also invest more in high-risk-high-return fields (e.g., ultra-deep recovery), diversifying their technology portfolio and ultimately gaining larger shares of the North Sea market. Our analyses illustrate how technology adoption can lead to market concentration both directly through specialization and indirectly via experimentation.

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