Multiplant Firms and Innovation Adoption and Diffusion
AbstractA new theoretical explanation is provided for the empirical observation that large firms usually adopt sooner, although there are notable exceptions. The analysis focuses on the adoption of an innovation of uncertain profitability by a large firm with two plants and a small firm with one. Marginal production costs are increasing in each plant, and economies of multiplant operation are possible. These have conflicting effects on the incentive to adopt. The large firm benefits more from adopting a success. However, if an adopter must shut down a plant to learn about the innovation, the loss of multiplant economies reduces the large firm’s incentive to adopt. Absent multiplant economies, the large firm is more likely to lead a diffusion because its greater return from a success dominates. However, the small firm is more likely to lead a diffusion if there are multiplant economies and the large firm’s learning cost disadvantage dominates.
Download InfoTo our knowledge, this item is not available for download. To find whether it is available, there are three options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
Bibliographic InfoArticle provided by Southern Economic Association in its journal Southern Economic Journal.
Volume (Year): 70 (2004)
Issue (Month): 3 (January)
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Chiara Verbano & Karen Venturini & Giorgio Petroni & Anna Nosella, 2008. "Characteristics of Italian art restoration firms and factors influencing their adoption of laser technology," Journal of Cultural Economics, Springer, vol. 32(1), pages 3-34, March.
- David A. Miller, 2005.
"Invention under uncertainty and the threat of ex post entry,"
- Miller, David A., 2008. "Invention under uncertainty and the threat of ex post entry," European Economic Review, Elsevier, vol. 52(3), pages 387-412, April.
- A. Mahati & Rupayan Pal, 2013. "Competition, strategic delegation and delay in technology adoption," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2013-016, Indira Gandhi Institute of Development Research, Mumbai, India.
- Arghya Ghosh & Munirul Nabin Haque, 2006. "Sequential technology adoption with asymmetric firms," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 15(2), pages 157-172.
- Timothy Park & Robert King, 2007. "Evaluating food retailing efficiency: the role of information technology," Journal of Productivity Analysis, Springer, vol. 27(2), pages 101-113, April.
- Park, Timothy A., 2007.
"Evaluating Labor Productivity in Food Retailing,"
2007 Annual Meeting, July 29-August 1, 2007, Portland, Oregon TN
9939, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Laura Razzolini).
If references are entirely missing, you can add them using this form.