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Forecasting the international diffusion of innovations: An adaptive estimation approach

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  • van Everdingen, Y.M.
  • Aghina, W.B.

Abstract

We introduce an international, adaptive diffusion model that can be used to forecast the cross-national diffusion of an innovation at early stages of the diffusion curve. We model the mutual influence between the diffusion processes in the different social systems (countries) by mixing behaviour. Furthermore, we apply the matching procedure as proposed by Dekimpe, Parker and Sarvary (1998). This international diffusion model is adaptively estimated using an augmented Kalman Filter with Continuous States and Discrete observations, developed by Xie, Song, Sirbu and Wang (1997). This is the first application of this procedure in an international context. We empirically applied this method to the diffusion of Internet access at home, and mobile telephony among households in the 15 countries of the European Union. The results show that our international, adaptive model performs well and is by far superior when compared to the classical method of estimating diffusion models for each country separately.

Suggested Citation

  • van Everdingen, Y.M. & Aghina, W.B., 2003. "Forecasting the international diffusion of innovations: An adaptive estimation approach," ERIM Report Series Research in Management ERS-2003-073-MKT, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
    • Handle: RePEc:ems:eureri:1093
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    References listed on IDEAS

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    More about this item

    Keywords

    bayesian estimation; cross-country diffusion; forecasting; international marketing;
    All these keywords.

    JEL classification:

    • C44 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Operations Research; Statistical Decision Theory
    • M - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics
    • M31 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Marketing
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries

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