| 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. |