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Acceleration of Technology Adoption withing Firms

Philipp Koellinger and Christian Schade ()
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Christian Schade: Humboldt-Universität zu Berlin

No 08-081/3, Tinbergen Institute Discussion Papers from Tinbergen Institute

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 (search for similar items in EconPapers)
JEL-codes: O14 O33 (search for similar items in EconPapers)
Date: 2008-09-03, Revised 2009-09-29
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Persistent link: https://EconPapers.repec.org/RePEc:tin:wpaper:20080081

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