nep-ict New Economics Papers
on Information and Communication Technologies
Issue of 2008‒09‒20
one paper chosen by
Walter Frisch
University Vienna

  1. Acceleration of Technology Adoption withing Firms By Philipp Koellinger; Christian Schade

  1. By: Philipp Koellinger (Erasmus University Rotterdam); Christian Schade (Humboldt-Universität zu Berlin)
    Abstract: This paper studies the diffusion of multiple, related technologies among firms. The results suggest an endogenous acceleration mechanism of technology adoption: The more advanced a firm is in using a particular set of technologies, the more likely it is to adopt additional, related technologies. We show that such a mechanism can occur under fairly general circumstances. If firms are not ex ante identical, the endogenous acceleration mechanism suggests a growing divergence in technological endowment of firms in the early phases after the emergence of a new technological paradigm. The theoretical predictions are tested with a dataset that records the adoption times of various e-business technologies in a large sample of firms from 10 different industry sectors and 25 European countries. The results show that the probability to adopt strictly increases with the number of previously adopted e-business technologies. Evidence for a growing digital divide among the companies in the sample is demonstrated for the period from 1994-2002.
    Keywords: Technology adoption; technological change; complementarity; hazard rate model; IT
    JEL: O33 O14
    Date: 2008–09–03

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