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Expectations, network effects and timing of technology adoption: some empirical evidence from a sample of SMEs in Italy

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  • Nicoletta Corrocher
  • Roberto Fontana

Abstract

We provide evidence on the influence of expectations and network effects on the timing of technological adoption. By considering a sample of SMEs operating in Italy we focus on the determinants of their decision to adopt Fast Ethernet, a communication standard for Local Area Networks (LANs). We find that both expectations and network effects significantly affect the timing of adoption. In particular, price expectations generally tend to delay adoption and (indirect) network effects in the form of backward compatibility as well as informational spillovers tend to foster adoption. Firm size also matters.
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  • Nicoletta Corrocher & Roberto Fontana, 2008. "Expectations, network effects and timing of technology adoption: some empirical evidence from a sample of SMEs in Italy," Small Business Economics, Springer, vol. 31(4), pages 425-441, December.
    • Handle: RePEc:kap:sbusec:v:31:y:2008:i:4:p:425-441
    DOI: 10.1007/s11187-007-9062-1
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    More about this item

    Keywords

    Diffusion; Network Effects; Expectations; LAN equipment; O33; L63; L26;
    All these keywords.

    JEL classification:

    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • L63 - Industrial Organization - - Industry Studies: Manufacturing - - - Microelectronics; Computers; Communications Equipment

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