Epidemic disease and innovation

It is well-documented that the TseTse fly, which transmits an epidemic disease lethal to livestock, has precluded technology adoption in Africa. In this study, we systematically examine the impact of the TseTse fly on firm innovation in modern Africa. Exploiting newly georeferenced firm data across the world, we find that firms in places that satisfy the TseTse survival conditions are less likely to innovate, and this relationship is unique to Africa and more pronounced in industries with higher innovation intensity. Exploring the channel, we find that people hold more hostile attitude towards technology in historically heavily infested areas.