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The Role of Product Innovation on the Diffusion of Mobile Telephone

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  • Koski, Heli
  • Kretchmer, Tobias

Abstract

Most existing empirical work on technology diffusion assumes technologies to remain constant throughout the diffusion process. However, many consumer technologies improve significantly over time. Using data on the characteristics of new mobile handsets over a ten-year period and controlling for potential endogeneity problems, we find that handset quality and variety had a significant impact on the global diffusion of mobile telephony. Our estimation results further suggest that earlier empirical studies on diffusion may have attributed too much of diffusion to network effects.

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Bibliographic Info

Paper provided by The Research Institute of the Finnish Economy in its series Discussion Papers with number 1200.

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Length: 17 pages
Date of creation: 2009
Date of revision:
Handle: RePEc:rif:dpaper:1200

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Keywords: product innovation; technology diffusion; mobile telephony;

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  1. Gruber, Harald & Verboven, Frank, 2001. "The evolution of markets under entry and standards regulation -- the case of global mobile telecommunications," International Journal of Industrial Organization, Elsevier, vol. 19(7), pages 1189-1212, July.
  2. Grajek, Michal & Kretschmer, Tobias, 2009. "Usage and diffusion of cellular telephony, 1998-2004," International Journal of Industrial Organization, Elsevier, vol. 27(2), pages 238-249, March.
  3. Koski, Heli & Kretschmer, Tobias, 2006. "Innovation and Dominant Design in Mobile Telephone," Discussion Papers 1012, The Research Institute of the Finnish Economy.
  4. Liikanen, Jukka & Stoneman, Paul & Toivanen, Otto, 2004. "Intergenerational effects in the diffusion of new technology: the case of mobile phones," International Journal of Industrial Organization, Elsevier, vol. 22(8-9), pages 1137-1154, November.
  5. Gruber, Harald & Verboven, Frank, 1999. "The Diffusion of Mobile Telecommunications Services in the European Union," CEPR Discussion Papers 2054, C.E.P.R. Discussion Papers.
  6. Diego Comin & Bart Hobijn & Emilie Rovito, 2008. "A new approach to measuring technology with an application to the shape of the diffusion curves," The Journal of Technology Transfer, Springer, vol. 33(2), pages 187-207, April.
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Cited by:
  1. Joan Crespo & Raphaël Suire & Jérôme Vicente, 2013. "Network structural properties for cluster long run dynamics. Evidence from collaborative R&D networks in the European mobile phone industry," Economics Working Paper Archive (University of Rennes 1 & University of Caen) 201336, Center for Research in Economics and Management (CREM), University of Rennes 1, University of Caen and CNRS.

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