On Vertical Relations and Technology Adoption Timing

Maria Alipranti, Chrysovalantou Miliou and Emmanuel Petrakis
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Chrysovalantou Miliou: Department of Economics, Universidad Carlos III de Madrid, Calle Madrid 126, Getafe (Madrid)
Authors registered in the RePEc Author Service: Chrysovalantou Milliou

No 1502, Working Papers from University of Crete, Department of Economics

Abstract: This paper explores how vertical relations influence the timing of new technology adoption. It shows that both the bargaining power distribution among the vertically related firms and the contract type through which vertical trading is conducted affect crucially the speed of adoption: the downstream firms can adopt later a new technology when the upstream bargaining power increases as well as when wholesale price contracts, instead of two-part tariffs, are employed. Importantly, it shows that technology adoption can take place earlier when firms obtain their inputs from external suppliers than when they produce them in-house; hence, the presence of vertical relations can accelerate the adoption of a new technology.

Keywords: Technology adoption; vertical relations; two-part tariffs; wholesale price contracts; bargaining (search for similar items in EconPapers)
JEL-codes: L13 L22 L41 O31 (search for similar items in EconPapers)
Date: 2014-11-30
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Citations: View citations in EconPapers (3)

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Related works:
Working Paper: On Vertical Relations and Technology Adoption Timing (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:crt:wpaper:1502

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