The Diffusion of New Technologies: Evidence from the Electric Utility Industry
AbstractThis article investigates the effect of firm size and ownership structure on technology adoption decisions using data on the electric utility industry. We argue that traditional models of technology diffusion may be subject to sample selectivity biases that overstate the effect of firm size on adoption probabilities. By extending conventional hazard rate models to use information on both adoption and nonadoption decisions, we differentiate between firms' opportunities for adoption and their underlying adoption propensities. The results suggest that large firms and investor-owned electric utilities are likely to adopt new technologies earlier than are their smaller and publicly owned counterparts. Moreover, the selection biases from conventional statistical models may overstate size effects and understate ownership and factor cost effects by as much as a factor of two.
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Bibliographic InfoArticle provided by The RAND Corporation in its journal RAND Journal of Economics.
Volume (Year): 21 (1990)
Issue (Month): 3 (Autumn)
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Web page: http://www.rje.org
Other versions of this item:
- Nancy L. Rose & Paul L. Joskow, 1988. "The Diffusion of New Technologies: Evidence from the Electric Utility Industry," Working papers, Massachusetts Institute of Technology (MIT), Department of Economics 501, Massachusetts Institute of Technology (MIT), Department of Economics.
- Nancy L. Rose & Paul L. Joskow, 1988. "The Diffusion of New Technologies: Evidence From the Electric Utility Industry," NBER Working Papers 2676, National Bureau of Economic Research, Inc.
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- Nickell, Stephen J, 1979. "Estimating the Probability of Leaving Unemployment," Econometrica, Econometric Society, Econometric Society, vol. 47(5), pages 1249-66, September.
- Benvignati, Anita M, 1982. "Interfirm Adoption of Capital-Goods Innovations," The Review of Economics and Statistics, MIT Press, MIT Press, vol. 64(2), pages 330-35, May.
- Stoneman, P L, 1985. "Technological Diffusion : The Viewpoint of Economic Theory," The Warwick Economics Research Paper Series (TWERPS), University of Warwick, Department of Economics 270, University of Warwick, Department of Economics.
- V. Kerry Smith, 1974. "The Implications of Regulation for Induced Technical Change," Bell Journal of Economics, The RAND Corporation, The RAND Corporation, vol. 5(2), pages 623-632, Autumn.
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