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Expectations, Network Effects and Timing of Technology Adoption: Some Empirical Evidence from a Sample of SMEs in Italy

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  • Nicoletta Corrocher

    (CESPRI, Bocconi University)

  • Roberto Fontana

    (University of Pavia and CESPRI)

Abstract

We provide evidence on the influence of expectations and network effects on the timing of technological adoption. By considering a sample of SMEs operating in Italy we focus on the determinants of their decision to adopt Fast Ethernet, a communication standard for Local Area Networks (LANs). We find that both expectations and network effects significantly affect the timing of adoption. In particular, price expectations generally tend to delay adoption and (indirect) network effects in the form of backward compatibility as well as informational spillovers tend to foster adoption. Firm size also matters.

Suggested Citation

  • Nicoletta Corrocher & Roberto Fontana, 2006. "Expectations, Network Effects and Timing of Technology Adoption: Some Empirical Evidence from a Sample of SMEs in Italy," SPRU Working Paper Series 150, SPRU - Science Policy Research Unit, University of Sussex Business School.
    • Handle: RePEc:sru:ssewps:150
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    More about this item

    Keywords

    diffusion; network effects; expectations; LAN equipment; SMEs;
    All these keywords.

    JEL classification:

    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • L63 - Industrial Organization - - Industry Studies: Manufacturing - - - Microelectronics; Computers; Communications Equipment

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