Proximity and the Adoption of Environmentally Sustainable Technologies : The Case of Organic Farming in Sweden

I analyse the role of geographical, cognitive, and social proximity in the decision to adopt organic farming in Sweden, using longitudinal data, including an experimental approach, and making use of the variation over time of farms’ exposure to early adopters in the neighbourhood. I find that the nearby presence of early adopters influences current adoption, proving the existence of neighbourhood effects in the diffusion of environmentally sustainable technologies across different industries. The effect becomes, in general, more pronounced when farmers share cognitive similarities but not necessarily with more social proximity. Nevertheless, the size of the effect is small in general, it decreases when time trends are accounted for, and it is mainly significant at the initial years of the period of analysis, not later. Still, the results are relevant in terms of the design of farm information and advisory services by the public administration, pointing at the necessity of a critical mass of organic adopters to accelerate the diffusion process, as per the insignificant effect of the first wave of early organic adopters