This paper studies the impact of the intensity of market competition on firms’ willingness to adopt green technologies. We exploit the staggered roll out of different ride-hailing platforms (most notably, Uber) across metropolitan areas in Spain as a natural experiment that provides time and city-specific exogenous variation in the intensity of competition to study the impact on taxi drivers’ decisions to purchase “green” or “dirty” vehicles. We show that the entry of these platforms significantly increased the takeout of green vehicles among professional drivers in incumbent (dominant) conventional taxi companies, while maintaining or slightly decreasing that of dirty ones. Some evidence of the opposite effect is observed in the cities where these platforms were extremely unlikely to enter. These results speak directly to the recent debate on whether competition policies should be relaxed to achieve certain environmental targets.
D22, K32, L20, 030, 033, Q55, R11
Market competition and the adoption of clean technology: evidence from the taxi industry
KeywordsTechnological change, Green technology adoption, Market competition, Diffusion of technology, Environmental externalities