| Sumario: | A study was conducted to examine the impact of regulation on a firm's choice of innovations and on the rate of technical change. Data were drawn from a 1977-87 panel of 20 U.S. interstate natural gas pipeline firms. The results reveal that regulation led firms to adopt a technology that augmented noncapital more than capital and noncapital more than the technology that the standard (unregulated) firm would have adopted. In addition, even though technical regress took place over the sample period, regulation gave rise to a small decline in the rate of technical change and a small rise in production cost on average.
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