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The Determinants of the Adoption Lag for Advanced Manufacturing Technologies

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  • Baldwin, John R.
  • Raffiquzzaman, Mohammed

Abstract

This paper examines the determinants of the adoption lag for advanced technologies in the Canadian manufacturing sector. It uses plant-level data collected on the length of the adoption lag (the time between a firm's first becoming aware of a new technology and its adoption of the technology) to examine the extent to which the adoption lag is a function of the benefits and costs associated with technology adoption as well as certain plant characteristics that are proxies for a plant's receptor capabilities. Economic theory suggests that the diffusion of advanced technologies should be a function of the benefits associated with the adoption of new technologies. Other studies have had to proxy the benefits with environmental characteristics-like proximity to markets, fertility of soils, size of firm. This paper makes use of more direct evidence collected from the 1993 Survey of Innovation and Advanced Technology concerning firms' own evaluations of the benefits and costs of adoption along with measures of overall technological competency. Both are found to be highly significant determinants of the adoption lag. Geographical nearness of suppliers decreases the adoption lag. Variables that have been previously used to proxy the benefits associated with technology adoption-variables such as larger firm size, younger age, and more diversification by the parent firm also decrease the adoption lag-but they have much less effect than the direct measure of benefits and firm competency.

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Bibliographic Info

Paper provided by Statistics Canada, Analytical Studies Branch in its series Analytical Studies Branch Research Paper Series with number 1998117e.

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Date of creation: 31 Aug 1998
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Handle: RePEc:stc:stcp3e:1998117e

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Keywords: Innovation; Science and technology;

References

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  1. Partha Dasgupta & Joseph Stiglitz, 1980. "Uncertainty, Industrial Structure, and the Speed of R&D," Bell Journal of Economics, The RAND Corporation, vol. 11(1), pages 1-28, Spring.
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  3. Taymaz, Erol, 1991. "Flexible automation in the U.S. engineering industries," International Journal of Industrial Organization, Elsevier, vol. 9(4), pages 557-572, December.
  4. Mookherjee, Dilip & Ray, Debraj, 1991. "On the competitive pressure created by the diffusion of innovations," Journal of Economic Theory, Elsevier, vol. 54(1), pages 124-147, June.
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  10. Hannan, Timothy H & McDowell, John M, 1987. "Rival Precedence and the Dynamics of Technology Adoption: An Empirical Analysis," Economica, London School of Economics and Political Science, London School of Economics and Political Science, vol. 54(214), pages 155-71, May.
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  12. Colombo, Massimo G & Mosconi, Rocco, 1995. "Complementarity and Cumulative Learning Effects in the Early Diffusion of Multiple Technologies," Journal of Industrial Economics, Wiley Blackwell, vol. 43(1), pages 13-48, March.
  13. Lane, Sarah J, 1991. "The Determinants of Investment in New Technology," American Economic Review, American Economic Association, vol. 81(2), pages 262-65, May.
  14. Ravenscraft, David J, 1983. "Structure-Profit Relationships at the Line of Business and Industry Level," The Review of Economics and Statistics, MIT Press, vol. 65(1), pages 22-31, February.
  15. Jensen, Richard, 1983. "Innovation adoption and diffusion when there are competing innovations," Journal of Economic Theory, Elsevier, vol. 29(1), pages 161-171, February.
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  17. Cohen, Wesley M. & Levin, Richard C., 1989. "Empirical studies of innovation and market structure," Handbook of Industrial Organization, Elsevier, in: R. Schmalensee & R. Willig (ed.), Handbook of Industrial Organization, edition 1, volume 2, chapter 18, pages 1059-1107 Elsevier.
  18. Fudenberg, Drew & Tirole, Jean, 1985. "Preemption and Rent Equilization in the Adoption of New Technology," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 52(3), pages 383-401, July.
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  20. Richard E. Caves, 1992. "Industrial Efficiency in Six Nations," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262031930, December.
  21. Garth Saloner & Andrea Shepard, 1995. "Adoption of Technologies with Network Effects: An Empirical Examination of the Adoption of Teller Machines," RAND Journal of Economics, The RAND Corporation, vol. 26(3), pages 479-501, Autumn.
  22. Baldwin, John R. & Diverty, Brent, 1995. "Advanced Technology Use in Canadian Manufacturing Establishments," Analytical Studies Branch Research Paper Series 1995085e, Statistics Canada, Analytical Studies Branch.
  23. Milgrom, Paul & Roberts, John, 1990. "The Economics of Modern Manufacturing: Technology, Strategy, and Organization," American Economic Review, American Economic Association, vol. 80(3), pages 511-28, June.
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Cited by:
  1. Parhi, Mamata, 2005. "Diffusion of New Technology in Indian Auto Component Industry: An Examination of the Determinants of Adoption," UNU-INTECH Discussion Paper Series, United Nations University - INTECH 08, United Nations University - INTECH.
  2. Hollenstein, Heinz, 2004. "Determinants of the adoption of Information and Communication Technologies (ICT): An empirical analysis based on firm-level data for the Swiss business sector," Structural Change and Economic Dynamics, Elsevier, vol. 15(3), pages 315-342, September.
  3. Heinz Hollenstein & Martin Woerter, 2004. "The Decision to Adopt Internet-based E-Commerce : An Empirical Analysis Based on Swiss Firm-level Data," KOF Working papers 04-89, KOF Swiss Economic Institute, ETH Zurich.

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