Discussion paper
DP19530 Institutional Innovation and the Adoption of New Technologies: The Case of Steam
This paper documents how the advent of the limited liability corporation contributed to the diffusion of steam technology during Sweden’s industrialization. Using longitudinal establishment-level data, we show that incorporation sharply raised the probability that industrial establishments adopted steam. Incorporation facilitated technology adoption partly by enabling smaller establishments to expand to a greater scale where the use of steam became feasible. These results highlight that low barriers to incorporation may be an important lever to facilitate the diffusion of new technologies.
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