The Determinants of Technology Diffusion: Evidence from the UK Financial Sector

We investigate the role of firm- and industry-specific factors in the diffusion of automated teller machines in the UK financial sector. A duration model of technology adoption is employed in the empirical modelling and is applied to an annual panel of adoption histories over the period 1972-97. The main factors affecting the diffusion of new technology are found to be endogenous learning, cumulative learning-by-doing effects, firm size, growth and profitability, and price expectations. There is little evidence, however, to support the role of stock effects in the diffusion process. The results are found to be robust across a number of specifications of the baseline hazard function. Copyright 2002 by Blackwell Publishers Ltd and The Victoria University of Manchester

[1]  Timothy H. Hannan,et al.  Rival Precedence and the Dynamics of Technology Adoption: An Empirical Analysis , 1987 .

[2]  Jennifer F. Reinganum.  On the diffusion of new technology: A game theoretic approach , 1981 .

[3]  Laurence L. George,et al.  The Statistical Analysis of Failure Time Data , 2003, Technometrics.

[4]  Patrick R. A. Kirkman,et al.  Electronic Funds Transfer Systems: The Revolution in Cashless Banking and Payment Methods , 1987 .

[5]  Trond Petersen,et al.  Estimating Fully Parametric Hazard Rate Models with Time-Dependent Covariates , 1986 .

[6]  N. Kiefer.  Economic Duration Data and Hazard Functions , 1988 .

[7]  P. Geroski.  Models of technology diffusion , 2000 .

[8]  J. Kalbfleisch,et al.  The Statistical Analysis of Failure Time Data , 1980 .

[9]  Lung-fei Lee,et al.  Simultaneous Equations Models with Discrete and Censored Variables , 1981 .

[10]  J. Kadane.  Structural Analysis of Discrete Data with Econometric Applications , 1984 .

[11]  M. Kamien,et al.  Market structure and innovation , 1982 .

[12]  Timothy H. Hannan,et al.  The Determinants of Technology Adoption: The Case of the Banking Firm , 1984 .

[13]  A. Jorge Padilla,et al.  Shared ATM networks and banking competition , 1994 .

[14]  Edwin Mansfield,et al.  The Economics of Technical Change , 1993 .

[15]  H. Quirmbach.  The diffusion of new technology and the market for an innovation , 1986 .

[16]  Jennifer F. Reinganum.  Market Structure and the Diffusion of New Technology , 1981 .

[17]  Garth Saloner,et al.  Digitized by the Internet Archive in 2011 with Funding from Adoption of Technologies Uith Network Effects: an Empirical Examination of the Adoption of Automated Teller Machines , 2022 .

[18]  D. Humphrey,et al.  Delivering Deposit Services: ATMs versus Branches , 1994 .

[19]  Paul Stoneman,et al.  Rank, Stock, Order And Epidemic Effects In The Diffusion Of New Process Technologies : An Empirical Model , 1990 .

[20]  S. Davies.  The Diffusion of Process Innovations , 1979 .

[21]  Rui Baptista,et al.  Do innovations diffuse faster within geographical clusters , 2000 .

[22]  Paul Stoneman,et al.  Order Effects, Perfect Foresight and Intertemporal Price Discrimination , 1985, Recherches économiques de Louvain.

[23]  M. Colombo,et al.  Complementarity and cumulative learning effects in early diffusion of multiple technologies , 1995 .

[24]  Francesco Lissoni,et al.  Diffusion of Innovation Ancient and Modem: A Review of the Main Themes , 1995 .

[25]  Kevin M. Murphy,et al.  Estimation and Inference in Two-Step Econometric Models , 1985 .

[26]  J. Fred Helf,et al.  Needles and pins. , .

[27]  D.,et al.  Regression Models and Life-Tables , 2022 .

[28]  Richard Aspinwall,et al.  Technological Innovation, Regulation, and the Monetary Economy , 1986 .

[29]  Paul Stoneman,et al.  RANK, STOCK, ORDER AND EPIDEMIC EFFECTS IN THE DIFFUSION OF NEW PROCESS TECHNOLOGIES: AN EMPIRICAL MODEL , 1993 .

[30]  D. Fudenberg,et al.  Preemption and Rent Equalization in the Adoption of New Technology , 1985 .

[31]  Neil Gandal,et al.  Complementary network externalities and technological adoption , 1993 .

[32]  J. Heckman,et al.  Econometric duration analysis , 1984 .

[33]  T. Petersen,et al.  Fitting parametric survival models with time-dependent covariates , 1986 .

[34]  H. Scarbrough,et al.  The Successful Exploitation of New Technology in Banking , 1988 .

[35]  E. Kaplan,et al.  Nonparametric Estimation from Incomplete Observations , 1958 .

[36]  P. Joskow,et al.  The Diffusion of New Technologies: Evidence from the Electric Utility Industry , 1988 .

[37]  Tony Lancaster,et al.  The econometric analysis of transition data , 1990 .

[38]  I. Arnon.  The Adoption of New Technology , 1989 .

[39]  J. Sarkar.  Technological Diffusion: Alternative Theories and Historical Evidence , 2002 .

[40]  P. Stoneman,et al.  Technological Diffusion, Expectations and Welfare , 1986 .

[41]  Bronwyn H Hall,et al.  Adoption of New Technology , 2003 .

[42]  Frederic P. Sterbenz.  Financial innovation and the money supply , 1986 .

[43]  Rajiv K. Sinha,et al.  A Split Hazard Model for Analyzing the Diffusion of Innovations , 1992 .

[44]  Z. Griliches.  HYBRID CORN: AN EXPLORATION IN THE ECONOMIC OF TECHNOLOGICAL CHANGE , 1957 .

[45]  Steve Thompson,et al.  The Adoption Of New Technology In Financial Services: The Case Of Building Societies , 1993 .