NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Organizational Barriers to Technology Adoption: Evidence from Soccer-Ball Producers in Pakistan

David Atkin, Azam Chaudhry, Shamyla Chaudry, Amit K. Khandelwal, Eric Verhoogen

NBER Working Paper No. 21417
Issued in July 2015, Revised in July 2016
NBER Program(s):Development Economics, International Trade and Investment, Labor Studies, Productivity, Innovation, and Entrepreneurship

This paper studies technology adoption in a cluster of soccer-ball producers in Sialkot, Pakistan. We invented a new cutting technology that reduces waste of the primary raw material and gave the technology to a random subset of producers. Despite the clear net benefits for nearly all firms, after 15 months take-up remained puzzlingly low. We hypothesize that an important 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 that originally received the technology: we offered one cutter and one printer per firm a lump-sum payment, approximately a month's earnings, conditional on demonstrating 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. The results suggest that misalignment of incentives within firms is an important barrier to technology adoption in our setting.

You may purchase this paper on-line in .pdf format from SSRN.com ($5) for electronic delivery.

Access to NBER Papers

You are eligible for a free download if you are a subscriber, a corporate associate of the NBER, a journalist, an employee of the U.S. federal government with a ".GOV" domain name, or a resident of nearly any developing country or transition economy.

If you usually get free papers at work/university but do not at home, you can either connect to your work VPN or proxy (if any) or elect to have a link to the paper emailed to your work email address below. The email address must be connected to a subscribing college, university, or other subscribing institution. Gmail and other free email addresses will not have access.

E-mail:

A non-technical summary of this paper is available in the October 2015 NBER digest.  You can sign up to receive the NBER Digest by email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w21417

Published: David Atkin & Azam Chaudhry & Shamyla Chaudry & Amit K. Khandelwal & Eric Verhoogen, 2017. "Organizational Barriers to Technology Adoption: Evidence from Soccer-Ball Producers in Pakistan," The Quarterly Journal of Economics, Oxford University Press, vol. 132(3), pages 1101-1164. citation courtesy of

Users who downloaded this paper also downloaded* these:
Atkin, Khandelwal, and Osman w20690 Exporting and Firm Performance: Evidence from a Randomized Trial
Garthwaite, Gross, and Notowidigdo w21290 Hospitals as Insurers of Last Resort
Brehm, Imberman, and Lovenheim w21598 Achievement Effects of Individual Performance Incentives in a Teacher Merit Pay Tournament
Jack, Oliva, Severen, Walker, and Bell w21414 Technology Adoption Under Uncertainty: Take-Up and Subsequent Investment in Zambia
Levitt and Lin w21628 Catching Cheating Students
 
Publications
Activities
Meetings
NBER Videos
Themes
Data
People
About

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us