It takes two: Experimental evidence on the determinants of technology diffusion

This paper reports on an experiment that brings insights from the literature on demand-side determinants of technology adoption to the study of peer-to-peer diffusion. We develop a custom weaving technique and randomly seed training into a real network of garment making firm owners in Ghana. Training leads to limited adoption among trainees, but little to no diffusion to non-trainees. In a second phase, we cross-randomize demand for the technique. Demand shocks increase adoption of the technology in both groups and diffusion to untrained firms, generated by a pattern in which trained firm owners teach approximately 400% more of their peers if they are randomly assigned to the demand intervention. We find no evidence that our main effects are driven by differences in ability (learning-by-doing) or other adoption-based mechanisms. Rather, our findings are most consistent with the demand intervention generating differential willingness to diffuse among potential teachers. •Tech-specific demand drives peer-to-peer diffusion for non-agricultural small firms.•Teachers diffuse to 400% more peers if randomly assigned to the demand intervention.•Mechanism evidence suggests demand alters willingness of teachers to diffuse.