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Technology Adoption and the Investment Climate: Firm-Level Evidence for Eastern Europe and Central Asia

  • Paulo G. Correa
  • Ana M. Fernandes
  • Chris J. Uregian

Survey data for 7,000 firms in 28 countries in Eastern Europe and Central Asia are used to examine the correlates of technology adoption proxied by ISO certification and web use. Complementary inputs such as skilled labor, managerial capacity, research and development, finance, and good infrastructure are shown to be important correlates of technology adoption. The link between market incentives and technology adoption is more nuanced. While stronger consumer pressure is significantly associated with technology adoption, competitor pressure is not, suggesting that in developing economies where many input markets are imperfect, it is primarily firms with rents that are able to adopt new technology. Foreign-owned firms exhibit significantly better technology adoption outcomes, but privatized firms with domestic owners do not. Copyright The Author 2010. Published by Oxford University Press on behalf of the International Bank for Reconstruction and Development / the world bank . All rights reserved. For permissions, please e-mail: journals.permissions@oxfordjournals.org, Oxford University Press.

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Article provided by World Bank Group in its journal The World Bank Economic Review.

Volume (Year): 24 (2010)
Issue (Month): 1 (January)
Pages: 121-147

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Handle: RePEc:oup:wbecrv:v:24:y:2010:i:1:p:121-147
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