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Diffusion of New Technology in Indian Auto Component Industry: An Examination of the Determinants of Adoption

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  • Parhi, Mamata

    ()
    (United Nations University, Institute for New Technologies)

Abstract

The contribution of new technologies to economic growth is harnessed only when new technologies are widely diffused in the economy. Diffusion results from a series of individual decisions to introduce the new technologies, decisions being the result of a comparison of the uncertain benefits and costs associated with adoption. An understanding of the factors affecting this choice is therefore an essential step forward in order to study the diffusion process of new technologies. The aim of this paper is to provide a comprehensive understanding of the possible set of factors determining adoption of new technologies such as Advanced Manufacturing Techniques (AMTs) in the Indian auto component industry. Building on both the early ‘epidemic' and the later ‘equilibrium' theories of adoption, our analysis is purported to provide an empirical exploration of determinants of adoption that takes into account the influence of structural, (i.e., firm-specific), and socio-economic factors on the process of adoption. Our results, though confirms most of the theoretical and empirical predictions about technology adoption, provides new evidence on the importance of external sources of knowledge and the crucial role of demand side on the adoption process.

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Bibliographic Info

Paper provided by United Nations University - INTECH in its series UNU-INTECH Discussion Paper Series with number 08.

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Date of creation: 2005
Date of revision:
Handle: RePEc:unm:unuint:200508

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Related research

Keywords: Technology Transfer; Diffusion of Innovations; Management Techniques; Production Control; Industrial Management; Industrial Cooperation; Automotive Industry; India;

References

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  1. Reinganum, Jennifer F, 1981. "On the Diffusion of New Technology: A Game Theoretic Approach," Review of Economic Studies, Wiley Blackwell, vol. 48(3), pages 395-405, July.
  2. Norman J. IRELAND & Paul L. STONEMAN, 1985. "Order Effects, Perfect Foresight and Intertemporal Price Discrimination," Discussion Papers (REL - Recherches Economiques de Louvain) 1985012, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
  3. Sarkar, Jayati, 1998. " Technological Diffusion: Alternative Theories and Historical Evidence," Journal of Economic Surveys, Wiley Blackwell, vol. 12(2), pages 131-76, April.
  4. Davies, Stephen W., 1979. "Inter-firm diffusion of process innovations," European Economic Review, Elsevier, vol. 12(4), pages 299-317, October.
  5. Fudenberg, Drew & Tirole, Jean, 1985. "Preemption and Rent Equilization in the Adoption of New Technology," Review of Economic Studies, Wiley Blackwell, vol. 52(3), pages 383-401, July.
  6. Baptista, Rui, 2000. "Do innovations diffuse faster within geographical clusters?," International Journal of Industrial Organization, Elsevier, vol. 18(3), pages 515-535, April.
  7. Eleonora Bartoloni & Maurizio Baussola, 2001. "The Determinants of Technology Adoption in Italian Manufacturing Industries," Review of Industrial Organization, Springer, vol. 19(3), pages 305-328, November.
  8. Stoneman, P., 1980. "The rate of imitation, learning and profitability," Economics Letters, Elsevier, vol. 6(2), pages 179-183.
  9. Reinganum, Jennifer F., . "Market Structure and the Diffusion of New Technology," Working Papers 360, California Institute of Technology, Division of the Humanities and Social Sciences.
  10. Baldwin, John R. Raffiquzzaman, Mohammed, 1998. "The Determinants of the Adoption Lag for Advanced Manufacturing Technologies," Analytical Studies Branch Research Paper Series 1998117e, Statistics Canada, Analytical Studies Branch.
  11. Rui Baptista, 1999. "The Diffusion of Process Innovations: A Selective Review," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 6(1), pages 107-129.
  12. Majumdar, Sumit K. & Venkataraman, S., 1993. "New technology adoption in US telecommunications: The role of competitive pressures and firm-level inducements," Research Policy, Elsevier, vol. 22(5-6), pages 521-536, November.
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