Acceleration of technology adoption within firms -- Emperical evidence from e-business

Philipp Koellinger and Christian Schade

ERIM Report Series Research in Management from Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam

Abstract: This paper studies the diffusion of multiple related technologies among firms. The results suggest an endogenous acceleration mechanism for 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 the 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 of adoption 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: IT; complementarity; hazard rate model; technological change; technology adoption (search for similar items in EconPapers)
JEL-codes: M M13 O14 O32 O33 (search for similar items in EconPapers)
Date: 2009-02-03
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