The intra-firm diffusion of new process technologies

Abstract

The study of intra-firm diffusion has largely been neglected and the limited extant literature overwhelmingly relies upon uncertainty reduction via information spreading or epidemic learning as the main driver. In this paper, an alternative approach is taken whereby the intra-firm diffusion of new process technologies reflects the profitability of new technology adoption as proxied by firm characteristics. The approach is tested using data relating to the diffusion of Computer Numerically Controlled Machine tools within firms in the UK engineering and metalworking sectors. The empirical analysis does not reject the hypothesis that profitability considerations are important with a number of firm characteristics being isolated as of special relevance, including firm size and the use of complementary technologies and managerial techniques. However there is little support for the traditional epidemic effect.