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Supplier Relations and Adoption of New Technology: Results of Survey Research in the U.S. Auto Industry

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  • Susan Helper

Abstract

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.

Suggested Citation

  • Susan Helper, 1995. "Supplier Relations and Adoption of New Technology: Results of Survey Research in the U.S. Auto Industry," NBER Working Papers 5278, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:5278
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    References listed on IDEAS

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    1. 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.
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    5. 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.
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    7. 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.
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    11. 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 168-185, March.
    12. Ray, George F., 1989. "Full circle: The diffusion of technology," Research Policy, Elsevier, vol. 18(1), pages 1-18, February.
    13. 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.
    14. Helper, Susan, 1991. "Strategy and Irreversibility in Supplier Relations: The Case of the U.S. Automobile Industry," Business History Review, Cambridge University Press, vol. 65(04), pages 781-824, December.
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    Citations

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    Cited by:

    1. Carlsson, Bo, 1992. "The Rise of Small Business: Causes and Consequences," Working Paper Series 357, Research Institute of Industrial Economics.
    2. repec:bla:stratm:v:38:y:2017:i:6:p:1253-1267 is not listed on IDEAS
    3. Bronwyn H. Hall & Beethika Khan, 2003. "Adoption of New Technology," NBER Working Papers 9730, National Bureau of Economic Research, Inc.
    4. Susan Athey & Scott Stern, 1998. "An Empirical Framework for Testing Theories About Complimentarity in Organizational Design," NBER Working Papers 6600, National Bureau of Economic Research, Inc.
    5. Maria Alipranti & Emmanuel Petrakis, 2013. "The Speed of Technological Adoption Under Price Competition: Two-Tier Vs One-Tier Industries," Working Papers 1307, University of Crete, Department of Economics.
    6. Bakos, J. Yannis. & Brynjolfsson, Erik., 1993. "When quality matters : information technology and buyer-supplier relationships," Working papers 140. Working paper (Sloan, Massachusetts Institute of Technology (MIT), Sloan School of Management.
    7. Alipranti, Maria & Milliou, Chrysovalantou & Petrakis, Emmanuel, 2015. "On vertical relations and the timing of technology adoption," Journal of Economic Behavior & Organization, Elsevier, vol. 120(C), pages 117-129.
    8. Athey, Susan. & Stern, Scott, 1969-, 1998. "An empirical framework for testing theories about complementarity in orgaziational design," Working papers WP 4022-98., Massachusetts Institute of Technology (MIT), Sloan School of Management.
    9. repec:bla:stratm:v:38:y:2017:i:11:p:2213-2236 is not listed on IDEAS
    10. Sharon Novak & Scott Stern, 2007. "Complementarity Among Vertical Integration Decisions: Evidence from Automobile Product Development," NBER Working Papers 13232, National Bureau of Economic Research, Inc.
    11. Maria Alipranti & Chrysovalantou Miliou & Emmanuel Petrakis, 2014. "On Vertical Relations and Technology Adoption Timing," Working Papers 1502, University of Crete, Department of Economics.
    12. José Albors & José Hervas & Antonio Hidalgo, 2006. "Analysing High Technology Diffusion and Public Transference Programs: The Case of the European Game Program," The Journal of Technology Transfer, Springer, vol. 31(6), pages 647-661, November.
    13. Maryellen R. Kelley & Susan Helper, 1999. "Firm Size And Capabilities, Regional Agglomeration, And The Adoption Of New Technology," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 8(1-2), pages 79-103.
    14. No, Angela, 2008. "Cities and Growth: Knowledge Spillovers in the Adoption of Advanced Manufacturing Technologies," The Canadian Economy in Transition 2008018e, Statistics Canada, Economic Analysis Division.

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