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

  • Schade, Christian
  • Köllinger, Philipp

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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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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  1. Economides, Nicholas, 1996. "The economics of networks," International Journal of Industrial Organization, Elsevier, vol. 14(6), pages 673-699, October.
  2. Bronwyn H. Hall & Beethika Khan, 2003. "Adoption of New Technology," NBER Working Papers 9730, National Bureau of Economic Research, Inc.
  3. 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.
  4. Shy, Oz, 1996. "Technology revolutions in the presence of network externalities," International Journal of Industrial Organization, Elsevier, vol. 14(6), pages 785-800, October.
  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, vol. 14(4), pages 3-22, Fall.
  6. Church, Jeffrey & Gandal, Neil, 1993. "Complementary network externalities and technological adoption," International Journal of Industrial Organization, Elsevier, vol. 11(2), pages 239-260, June.
  7. Dosi, Giovanni, 1993. "Technological paradigms and technological trajectories : A suggested interpretation of the determinants and directions of technical change," Research Policy, Elsevier, vol. 22(2), pages 102-103, April.
  8. William D. Nordhaus, 2001. "Productivity Growth and the New Economy," NBER Working Papers 8096, National Bureau of Economic Research, Inc.
  9. Arthur, W Brian, 1989. "Competing Technologies, Increasing Returns, and Lock-In by Historical Events," Economic Journal, Royal Economic Society, vol. 99(394), pages 116-31, March.
  10. Stoneman, Paul & Kwon, Myung-Joong, 1994. "The Diffusion of Multiple Process Technologies," Economic Journal, Royal Economic Society, vol. 104(423), pages 420-31, March.
  11. Colombo, Massimo G & Mosconi, Rocco, 1995. "Complementarity and Cumulative Learning Effects in the Early Diffusion of Multiple Technologies," Journal of Industrial Economics, Wiley Blackwell, vol. 43(1), pages 13-48, March.
  12. Katz, Michael L & Shapiro, Carl, 1985. "Network Externalities, Competition, and Compatibility," American Economic Review, American Economic Association, vol. 75(3), pages 424-40, June.
  13. Dale W. Jorgenson, 2001. "Information Technology and the U.S. Economy," American Economic Review, American Economic Association, vol. 91(1), pages 1-32, March.
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