The Determinants of the Adoption Lag for Advanced Manufacturing Technologies

This paper examines the determinants of the adoption lag for advanced technologies in the Canadian manufacturing sector. It uses plant-level data collected on the length of the adoption lag (the time between a firm's first becoming aware of a new technology and its adoption of the technology) to examine the extent to which the adoption lag is a function of the benefits and costs associated with technology adoption as well as certain plant characteristics that are proxies for a plant's receptor capabilities. Economic theory suggests that the diffusion of advanced technologies should be a function of the benefits associated with the adoption of new technologies. Other studies have had to proxy the benefits with environmental characteristics--like proximity to markets, fertility of soils, and size of firm. This paper makes use of more direct evidence collected from the 1993 Survey of Innovation and Advanced Technology concerning firms' own evaluations of the benefits and costs of adoption along with measures of overall technological competency. Both are found to be highly significant determinants of the adoption lag. Geographical nearness of suppliers decreases the adoption lag. Variables that have been previously used to proxy the benefits associated with technology adoption--variables such as larger firm size, younger age, and more diversification by the parent firm--also decrease the adoption lag, but they have much less effect than the direct measure of benefits and firm competency