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Technology Adoption In and Out of Major Urban Areas: When Do Internal Firm Resources Matter Most?

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Author Info
Chris Forman
Avi Goldfarb
Shane Greenstein

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Abstract

How much do internal firm resources contribute to technology adoption in major urban locations, where the advantages from agglomeration are greatest? The authors address this question in the context of a business's decision to adopt advanced Internet technology. Drawing on a rich data set of adoption decisions by 86,879 U.S. establishments, the authors find that the marginal contribution of internal resources to adoption is greater outside of a major urban area than inside one. Agglomeration is therefore less important for highly capable firms. The authors conclude that firms behave as if resources available in cities are substitutes for both establishment-level and firm-level internal resources.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 11642.

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Date of creation: Sep 2005
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Handle: RePEc:nbr:nberwo:11642

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Find related papers by JEL classification:
R30 - Urban, Rural, and Regional Economics - - Production Analysis and Firm Location - - - General
O33 - Economic Development, Technological Change, and Growth - - Technological Change - - - Technological Change: Choices and Consequences; Diffusion Processes
L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Gilles Duranton & Diego Puga, 2001. "Nursery Cities: Urban Diversity, Process Innovation, and the Life Cycle of Products," American Economic Review, American Economic Association, vol. 91(5), pages 1454-1477, December. [Downloadable!] (restricted)
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  2. Goolsbee, Austan & Klenow, Peter J, 2002. "Evidence on Learning and Network Externalities in the Diffusion of Home Computers," Journal of Law & Economics, University of Chicago Press, vol. 45(2), pages 317-43, October.
    Other versions:
  3. Colombo, Massimo G & Mosconi, Rocco, 1995. "Complementarity and Cumulative Learning Effects in the Early Diffusion of Multiple Technologies," Journal of Industrial Economics, Blackwell Publishing, vol. 43(1), pages 13-48, March. [Downloadable!] (restricted)
  4. Chris Forman & Avi Goldfarb & Shane Greenstein, 2002. "Digital Dispersion: An Industrial and Geographic Census of Commerical Internet Use," NBER Working Papers 9287, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  5. Thomas J. Holmes & John J. Stevens, 2002. "Geographic Concentration and Establishment Scale," The Review of Economics and Statistics, MIT Press, vol. 84(4), pages 682-690, 07. [Downloadable!] (restricted)
  6. Thomas J. Holmes, 1999. "Localization Of Industry And Vertical Disintegration," The Review of Economics and Statistics, MIT Press, vol. 81(2), pages 314-325, May. [Downloadable!] (restricted)
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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Galliano, D. & Lethiais, V. & Soulié, N., 2006. "Faible densité des espaces et usages des TIC par les entreprises : besoin d'information ou de coordination ?," Economics Working Paper Archive (Toulouse) 200605, French Institute for Agronomy Research (INRA), Economics Laboratory in Toulouse (ESR Toulouse). [Downloadable!]
  2. Galliano, D. & Roux, P., 2005. "The evolution of the spatial digital divide : from internet adoption to internet use by french industrial firms," Economics Working Paper Archive (Toulouse) 200513, French Institute for Agronomy Research (INRA), Economics Laboratory in Toulouse (ESR Toulouse). [Downloadable!]
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