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Sunk Costs and the Depth and Probability of Technology Adoption

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  • Thomas Astebro
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    Abstract

    I propose that sunk costs of learning and the output over which these costs are spread determine the probability and depth of technology adoption. Depth of adoption describes the extent to which firms exploit the advantages of the technology. I find that plant size but not firm size predicts CAD and CNC adoption. Learning costs are lumpy, are closely connected to technology adoption and determine both the probability and depth of adoption. Depth of adoption is considerably more plant idiosyncratic than the decision to adopt. Copyright Blackwell Publishing Ltd. 2004.

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    Bibliographic Info

    Article provided by Wiley Blackwell in its journal The Journal of Industrial Economics.

    Volume (Year): 52 (2004)
    Issue (Month): 3 (09)
    Pages: 381-399

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    Handle: RePEc:bla:jindec:v:52:y:2004:i:3:p:381-399

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    Cited by:
    1. Jonathan Beck & Michal Grajek & Christian Wey, 2007. "Estimating level effects in diffusion of a new technology: Barcode scanning at the checkout counter," ESMT Research Working Papers ESMT-07-002, ESMT European School of Management and Technology.
    2. Goldfarb, Avi & Prince, Jeff, 2008. "Internet adoption and usage patterns are different: Implications for the digital divide," Information Economics and Policy, Elsevier, vol. 20(1), pages 2-15, March.
    3. Danielle Galliano & Luis Orozco, 2013. "New Technologies and Firm Organization: The Case of Electronic Traceability Systems in French Agribusiness," Industry and Innovation, Taylor & Francis Journals, vol. 20(1), pages 22-47, January.
    4. Rennings, Klaus & Markewitz, Peter & Vögele, Stefan, 2009. "How clean is clean? Incremental versus radical technological change in coal-fired power plants," ZEW Discussion Papers 09-021, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    5. Danielle GALLIANO (LEREPS-GRES & INRA-ETIC ) & Pascale ROUX (ADIS, Université Paris Sud ), 2005. "The evolution of the spatial digital divide: From internet adoption to internet use by french industrial firms," Cahiers du GRES 2005-25, Groupement de Recherches Economiques et Sociales.
    6. Giuliana Battisti & Heinz Hollenstein & Paul Stoneman & Martin Woerter, 2007. "Inter And Intra Firm Diffusion Of Ict In The United Kingdom (Uk) And Switzerland (Ch) An Internationally Comparative Study Based On Firm-Level Data," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 16(8), pages 669-687.
    7. Adelheid Holl & Rafael Pardo & Ruth Rama, 2011. "Spatial patterns of adoption of just-in-time manufacturing," ERSA conference papers ersa11p385, European Regional Science Association.
    8. Gomez, Jaime & Vargas, Pilar, 2009. "The effect of financial constraints, absorptive capacity and complementarities on the adoption of multiple process technologies," Research Policy, Elsevier, vol. 38(1), pages 106-119, February.
    9. Adel Ben Youssef & Walid Hadhri & Hatem M'Henni, 2011. "Intra-Firm Diffusion of Innovation: Evidence from Tunisian SME's in Matters of Information and Communication Technologies," Post-Print halshs-00937179, HAL.
    10. Heinz Hollenstein & Martin Woerter, 2007. "Inter- and Intra-Firm Diffusion of Technology: the Example of E-commerce : An Analysis based on Swiss Firm-level Data," KOF Working papers 07-157, KOF Swiss Economic Institute, ETH Zurich.
    11. Fuentelsaz, Lucio & Gómez, Jaime & Palomas, Sergio, 2009. "The effects of new technologies on productivity: An intrafirm diffusion-based assessment," Research Policy, Elsevier, vol. 38(7), pages 1172-1180, September.
    12. Arora, Ashish & Forman, Chris & Yoon, Ji Woong, 2010. "Complementarity and information technology adoption: Local area networks and the Internet," Information Economics and Policy, Elsevier, vol. 22(3), pages 228-242, July.
    13. Danielle Galliano & Pascale Roux, 2008. "Organisational motives and spatial effects in Internet adoption and intensity of use: evidence from French industrial firms," The Annals of Regional Science, Springer, vol. 42(2), pages 425-448, June.
    14. Anja Lambrecht & Katja Seim, 2006. "Adoption and Usage of Online Services in the Presence of Complementary Offline Services: Retail Banking," Working Papers 06-27, NET Institute, revised Oct 2006.

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