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Small Business Economics

, Volume 31, Issue 4, pp 425–441 | Cite as

Expectations, network effects and timing of technology adoption: some empirical evidence from a sample of SMEs in Italy

  • Nicoletta CorrocherEmail author
  • Roberto Fontana
Article

Abstract

We provide evidence on the influence of expectations and network effects on the timing of technological adoption. By considering a sample of SMEs operating in Italy, we focus on the determinants of their decision to adopt Fast Ethernet, a communication standard for Local Area Networks (LANs). We find that both expectations and network effects significantly affect the timing of adoption. In particular, price expectations generally tend to delay adoption and (indirect) network effects in the form of backward compatibility as well as informational spillovers tend to foster adoption. Firm size also matters.

Keywords

Diffusion Network Effects Expectations LAN equipment 

JEL Classifications

O33 L63 L26 

Notes

Acknowledgements

We wish to thank three anonymous referees for their comments. Usual disclaimers apply. Financial support from the Italian Ministry of Research (MIUR—n°2003137229) is acknowledged. Nicoletta Corrocher would like to acknowledge the financial support of the Research Council of Norway (Project n°172603/V10: “The Knowledge-based society”). Earlier versions of this paper were presented at the DRUID Summer Conference 2005 Copenhagen, the workshop on Demand, Innovation and Industrial Dynamics 2005, Milan, and the Academy of Management 2006 Conference Atlanta. The comments and suggestions of participants at these meetings are much appreciated.

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Copyright information

© Springer Science+Business Media, LLC 2007

Authors and Affiliations

  1. 1.CESPRI-Bocconi UniversityMilanItaly
  2. 2.Department of Economics, NFHUniversity of TromsoTromsoNorway
  3. 3.Department of EconomicsUniversity of PaviaVia San FeliceItaly

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