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Acceleration of Technology Adoption withing Firms

Author

Listed:
  • 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.

Suggested Citation

  • Philipp Koellinger & Christian Schade, 2008. "Acceleration of Technology Adoption withing Firms," Tinbergen Institute Discussion Papers 08-081/3, Tinbergen Institute, revised 29 Sep 2009.
    • Handle: RePEc:tin:wpaper:20080081
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    More about this item

    Keywords

    Technology adoption; technological change; complementarity; hazard rate model; IT;
    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
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology

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