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Acceleration of Technology Adoption withing Firms

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Author Info

  • Philipp Koellinger

    () (Erasmus University Rotterdam)

  • Christian Schade

    () (Humboldt-Universität zu Berlin)

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.

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Bibliographic Info

Paper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 08-081/3.

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Date of creation: 03 Sep 2008
Date of revision: 29 Sep 2009
Handle: RePEc:dgr:uvatin:20080081

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Related research

Keywords: Technology adoption; technological change; complementarity; hazard rate model; IT;

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