Two essays on technology diffusion
Abstract
This thesis includes two essays. Essay 1 analyzes the diffusion process of a cost-reducing technology innovation within an industry. Two factors generate the diffusion. The first factor is the gently declining production cost with the innovation, which makes technology adoption more profitable for firms with the passage of time. The other factor is the cost of technology adoption, which tends to retard adoption. The model explains multiple stylized facts and important observations in technology diffusion, which include (1) the S-shaped diffusion path, (2) the slowness in diffusion process, (3) permanent rejection of an innovation, (4) unprofitable technology adoption and, (5) the significant difference in diffusion rate across innovations. Essay 2 analizes the diffusion of internet-based distance education technology (NETDE) among the U.S. associate colleges. The study finds that an institution with experience in using earlier generations distance education technology is more likely to adopt NETDE than an institution without such experience. Similarly, an institution's distance education office significantly facilitates the utilization of NETDE technology. These findings support the view of Cohen and Levinthal (1990) that an organization's "absorptive capability" is important in its innovative activities. Institution size also facilitates the adoption of NETDE. This size effect is partly caused by market friction in the NETDE distance education market. Finally, we find that the presence of close competitors motivates an associate college to adopt NETDE earlier.
Degree
Ph.D.
Advisors
Martin, Purdue University.
Subject Area
Economics
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