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Technology Adoption In and Out of Major Urban Areas: When Do Internal Firm Resources Matter Most?

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  • Chris Forman
  • Avi Goldfarb
  • Shane Greenstein

Abstract

How much do internal firm resources contribute to technology adoption in major urban locations, where the advantages from agglomeration are greatest? The authors address this question in the context of a business's decision to adopt advanced Internet technology. Drawing on a rich data set of adoption decisions by 86,879 U.S. establishments, the authors find that the marginal contribution of internal resources to adoption is greater outside of a major urban area than inside one. Agglomeration is therefore less important for highly capable firms. The authors conclude that firms behave as if resources available in cities are substitutes for both establishment-level and firm-level internal resources.

Suggested Citation

  • Chris Forman & Avi Goldfarb & Shane Greenstein, 2005. "Technology Adoption In and Out of Major Urban Areas: When Do Internal Firm Resources Matter Most?," NBER Working Papers 11642, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:11642
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    References listed on IDEAS

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    Cited by:

    1. Hu, Chaoran & Zhang, Xiaobo & Reardon, Thomas & Hernandez, Ricardo, 2019. "Value-chain clusters and aquaculture innovation in Bangladesh," Food Policy, Elsevier, vol. 83(C), pages 310-326.

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    More about this item

    JEL classification:

    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software

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