We examine whether there is a tradeoff between employing internal (firm) resources and purchased external (local) resources in process innovation. We draw on a rich data set of Internet investments by 86,879 U.S. establishments to examine decisions to invest in advanced Internet technology. We...

Economic experiments yield lessons to firms that can be acquired only through market experience. Economic experiments cannot take place in a laboratory; scientists, engineers, or marketing executives cannot distill equivalent lessons from simply building a prototype or interviewing potential...