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The Adoption Of Technological Innovations: Dynamic And Cumulative Effects In Telecommunications Networks

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  • Paola Garrone

Abstract

This paper studies the effects of the adoption of technological innovations on the efficiency of telecommunications (TLC) carriers. Firstly, since uncertainty and extra costs are likely to characterize the early phases of adoption, dynamic performances can be strikingly different from the steady state ones. Secondly, differences among carriers in technological history do matter; firms who cumulated a greater deal of specific innovations will be better at using the new technology. A cost model is formulated. The adoption of digital switching equipment is observed and a sample has been gathered for twelve european countries, over the period 1980-'89. As far as empirical findings are concerned, innovative carriers expose themselves to a transient cost increase, to be cumulated with any subsequent efficiency gain; a cost cycle is determined by the adoption of new equipment; cumulativeness is at work.

Suggested Citation

  • Paola Garrone, 1995. "The Adoption Of Technological Innovations: Dynamic And Cumulative Effects In Telecommunications Networks," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 4(1), pages 1-16.
    • Handle: RePEc:taf:ecinnt:v:4:y:1995:i:1:p:1-16
    DOI: 10.1080/10438599500000010
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    References listed on IDEAS

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    Cited by:

    1. Garrone, Paola, 1996. "Network subscription and services usage in European telecommunications industries," Information Economics and Policy, Elsevier, vol. 8(1), pages 25-50, March.

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    JEL classification:

    • L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications

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