@article{Heikkila:144002,
      recid = {144002},
      author = {Heikkila, Anna-Maija and Myyra, Sami and Pietola, Kyosti},
      title = {Effects of Economic Factors on Adoption of Robotics and  Consequences of Automation for Productivity Growth of Dairy  Farms},
      address = {2012-12-05},
      number = {545-2016-38741},
      series = {Factor Markets Working Paper},
      pages = {18},
      month = {Dec},
      year = {2012},
      abstract = {In the long term, productivity and especially productivity  growth are necessary conditions for the survival of a farm.  In this paper, we focus on the technology choice of a dairy  farm, i.e. the choice between a conventional and an  automatic milking system. Our aim is to reveal the extent  to which economic rationality explains investing in new  technology. The adoption of robotics is further linked to  farm productivity to show how capital-intensive technology  has affected the overall productivity of milk production.  In our empirical analysis, we apply a probit model and an  extended Cobb-Douglastype production function to a Finnish  farm-level dataset for the years 2000–10. The results show  that very few economic factors on a dairy farm or in its  economic environment can be identified to affect the switch  to automatic milking. Existing machinery capital and  investment allowances are among the significant factors.  The results also indicate that the probability of investing  in robotics responds elastically to a change in investment  aids: an increase of 1% in aid would generate an increase  of 2% in the probability of investing. Despite the presence  of non-economic incentives, the switch to robotic milking  is proven to promote productivity development on dairy  farms. No productivity growth is observed on farms that  keep conventional milking systems, whereas farms with  robotic milking have a growth rate of 8.1% per year. The  mean rate for farms that switch to robotic milking is 7.0%  per year. The results show great progress in productivity  growth, with the average of the sector at around 2% per  year during the past two decades. In conclusion,  investments in new technology as well as investment aids to  boost investments are needed in low-productivity areas  where investments in new technology still have great  potential to increase productivity, and thus profitability  and competitiveness, in the long run.},
      url = {http://ageconsearch.umn.edu/record/144002},
      doi = {https://doi.org/10.22004/ag.econ.144002},
}