Supplier Relations and Adoption of New Technology: Results of Survey Research in the U.S. Auto Industry
Using an original data source, this paper investigates the circumstances under which firms adopt computer numerical control (CNC), an important type of flexible automation which can significantly increase productivity, product variety and quality. The paper shows that arms'-length supplier/customer relationships are a significant barrier to CNC adoption, even where CNC would improve efficiency. For firms where CNC would be efficient, but who currently receive little commitment from their customers, an increase in contract length of one year would increase the adoption rate by 30%. These results have theoretical implications in two areas. First, the paper integrates questions of appropriability into the technical change literature, by adding supplier relations as a determinant of technology adoption. Second, the paper extends transaction-cost analysis, by relaxing the assumption that agents' private maximizing behavior will always produce organizational forms that maximize social efficiency.
|Date of creation:||Sep 1995|
|Date of revision:|
|Publication status:||published as With David I. Levine, published as "Long-Term Supplier Relations and Product-Market Structure", Journal of Law, Economics and Organization, Vol. 8, no. 3 (1992): 561-581.|
|Contact details of provider:|| Postal: |
Web page: http://www.nber.org
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Timothy H. Hannan & John M. McDowell, 1984. "The Determinants of Technology Adoption: The Case of the Banking Firm," RAND Journal of Economics, The RAND Corporation, vol. 15(3), pages 328-335, Autumn.
- Helper, Susan & Levine, David I, 1992. "Long-Term Supplier Relations and Product-Market Structure," Journal of Law, Economics and Organization, Oxford University Press, vol. 8(3), pages 561-81, October.
- Lieberman, Marvin B, 1991. "Determinants of Vertical Integration: An Empirical Test," Journal of Industrial Economics, Wiley Blackwell, vol. 39(5), pages 451-66, September.
- Hannan, Timothy H & McDowell, John M, 1984. "Market Concentration and the Diffusion of New Technology in the Banking Industry," The Review of Economics and Statistics, MIT Press, vol. 66(4), pages 686-91, November.
- Joskow, Paul L, 1987. "Contract Duration and Relationship-Specific Investments: Empirical Evidence from Coal Markets," American Economic Review, American Economic Association, vol. 77(1), pages 168-85, March.
- Klein, Benjamin & Crawford, Robert G & Alchian, Armen A, 1978. "Vertical Integration, Appropriable Rents, and the Competitive Contracting Process," Journal of Law and Economics, University of Chicago Press, vol. 21(2), pages 297-326, October.
- Mandfield, Edwin, 1989. "The diffusion of industrial robots in Japan and the United States," Research Policy, Elsevier, vol. 18(4), pages 183-192, August.
- J. Bradford De Long & Lawrence H. Summers, 1990.
"Equipment Investment and Economic Growth,"
NBER Working Papers
3515, National Bureau of Economic Research, Inc.
- Joskow, Paul L, 1985.
"Vertical Integration and Long-term Contracts: The Case of Coal-burning Electric Generating Plants,"
Journal of Law, Economics and Organization,
Oxford University Press, vol. 1(1), pages 33-80, Spring.
- Paul Joskow, 1984. "Vertical Integration and Long Term Contracts: The Case of Coal Burning Electric Generating Plants," Working papers 361, Massachusetts Institute of Technology (MIT), Department of Economics.
- Ray, George F., 1989. "Full circle: The diffusion of technology," Research Policy, Elsevier, vol. 18(1), pages 1-18, February.
- Carlsson, Bo & Jacobsson, Staffan, 1994. "Technological systems and economic policy: the diffusion of factory automation in Sweden," Research Policy, Elsevier, vol. 23(3), pages 235-248, May.
- Sharon Oster, 1982. "The Diffusion of Innovation among Steel Firms: The Basic Oxygen Furnace," Bell Journal of Economics, The RAND Corporation, vol. 13(1), pages 45-56, Spring.
- Riordan, Michael H. & Williamson, Oliver E., 1985. "Asset specificity and economic organization," International Journal of Industrial Organization, Elsevier, vol. 3(4), pages 365-378, December.
- Shaked, Avner & Sutton, John, 1984. "Involuntary Unemployment as a Perfect Equilibrium in a Bargaining Model," Econometrica, Econometric Society, vol. 52(6), pages 1351-64, November.
When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:5278. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If references are entirely missing, you can add them using this form.