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Sunk Costs and the Depth and Probability of Technology Adoption

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Author Info
Thomas Astebro
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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Article provided by Blackwell Publishing 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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  1. 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. [Downloadable!]
    Other versions:
  2. 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. [Downloadable!]
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  3. Giuliana Battisti & Heinz Hollenstein & Paul Stoneman & Martin Woerter, 2005. "Inter and Intra firm Diffusion of ICT in the United Kingdom (UK) and Switzerland (CH) : An Internationally Comparative Study Based on Firm-level Data," KOF Working papers 05-111, KOF Swiss Economic Institute, ETH Zurich. [Downloadable!]
    Other versions:
  4. Tobias Kretschmer, 2005. "Competing technologies in the database management systems market," Working Papers 05-17, NET Institute, revised Oct 2005. [Downloadable!]
    Other versions:
  5. 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. [Downloadable!]
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