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Adoption of e-business: patterns and consequences of network externalities

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  • Schade, Christian
  • Köllinger, Philipp

Abstract

The paper analyzes the adoption of various e-business technologies. Strong empirical evidence is found for the existence of increasing returns to adoption due to indirect network externalities between related technologies. If a company is close to the technological frontier, its probability of adoption increases. The empirical analysis is based on more than 5,000 observations from a cross-sectional European enterprise survey conducted in June 2002. A classification and regression tree (CART) is used to illustrate technological complementarities and their effect for the adoption probability of a firm. --

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Bibliographic Info

Paper provided by Humboldt-Universität Berlin, Center for Applied Statistics and Economics (CASE) in its series Papers with number 2004,05.

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Date of creation: 2004
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Handle: RePEc:zbw:caseps:200405

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Keywords: Technology Adoption; Path Dependence; Classification Trees;

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  1. Stoneman, P L, 1985. "Technological Diffusion : The Viewpoint of Economic Theory," The Warwick Economics Research Paper Series (TWERPS) 270, University of Warwick, Department of Economics.
  2. William D. Nordhaus, 2000. "Productivity Growth and the New Economy," Cowles Foundation Discussion Papers, Cowles Foundation for Research in Economics, Yale University 1284, Cowles Foundation for Research in Economics, Yale University.
  3. Hall, Bronwyn H. & Khan, Beethika, 2003. "Adoption of New Technology," Department of Economics, Working Paper Series, Department of Economics, Institute for Business and Economic Research, UC Berkeley qt3wg4p528, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
  4. Church, Jeffrey & Gandal, Neil, 1993. "Complementary network externalities and technological adoption," International Journal of Industrial Organization, Elsevier, Elsevier, vol. 11(2), pages 239-260, June.
  5. Stephen D. Oliner & Daniel E. Sichel, 2000. "The Resurgence of Growth in the Late 1990s: Is Information Technology the Story?," Journal of Economic Perspectives, American Economic Association, American Economic Association, vol. 14(4), pages 3-22, Fall.
  6. Nicholas Economides, 1997. "The Economics of Networks," Brazilian Electronic Journal of Economics, Department of Economics, Universidade Federal de Pernambuco, Department of Economics, Universidade Federal de Pernambuco, vol. 1(0), December.
  7. Shy, Oz, 1996. "Technology revolutions in the presence of network externalities," International Journal of Industrial Organization, Elsevier, Elsevier, vol. 14(6), pages 785-800, October.
  8. Dosi, Giovanni, 1993. "Technological paradigms and technological trajectories : A suggested interpretation of the determinants and directions of technical change," Research Policy, Elsevier, Elsevier, vol. 22(2), pages 102-103, April.
  9. Stoneman, Paul & Kwon, Myung-Joong, 1994. "The Diffusion of Multiple Process Technologies," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 104(423), pages 420-31, March.
  10. Colombo, Massimo G & Mosconi, Rocco, 1995. "Complementarity and Cumulative Learning Effects in the Early Diffusion of Multiple Technologies," Journal of Industrial Economics, Wiley Blackwell, Wiley Blackwell, vol. 43(1), pages 13-48, March.
  11. Katz, Michael L & Shapiro, Carl, 1985. "Network Externalities, Competition, and Compatibility," American Economic Review, American Economic Association, American Economic Association, vol. 75(3), pages 424-40, June.
  12. Dale W. Jorgenson, 2001. "Information Technology and the U.S. Economy," American Economic Review, American Economic Association, American Economic Association, vol. 91(1), pages 1-32, March.
  13. Arthur, W Brian, 1989. "Competing Technologies, Increasing Returns, and Lock-In by Historical Events," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 99(394), pages 116-31, March.
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