Publication: Technology Adoption and the Investment Climate : Firm-Level Evidence for Eastern Europe and Central Asia
Date
2008-09
ISSN
Published
2008-09
Author(s)
Abstract
The international diffusion of
technology presents an opportunity for developing economies
distant from the world technological frontier to reduce
their income gap relative to advanced economies. It is
therefore crucial to understand why, when faced with similar
technological alternatives different firms in different
countries choose to adopt different vintages of capital.
This paper examines technology adoption across firms in
Eastern Europe and Central Asia. The findings show that
access to complementary inputs - managerial capacity,
skilled labor, finance, and good infrastructure - and to
international knowledge - through foreign direct investment
or exports - is an important correlate of technology
adoption. The link between market incentives and technology
adoption is more nuanced. Although consumer pressure results
in technology adoption, competitor pressure does not,
suggesting that only firms with rents are able to adopt
technology given substantial resource constraints.
Privatized firms exhibit better technology adoption outcomes
but only when a clear private owner with a profit incentive
is present. Better governance is associated with technology
adoption only in the countries that joined the European
Union in 2004. Future increases in technology adoption by
firms in the region will require complementary reforms of
the investment climate.
Citation
“Correa, Paulo G.; Fernandes, Ana M.; Uregian, Chris J.. 2008. Technology Adoption and the Investment Climate : Firm-Level Evidence for Eastern Europe and Central Asia. Policy Research Working Paper No. 4707. © World Bank, Washington, DC. http://openknowledge.worldbank.org/entities/publication/d6995e87-f452-585c-b1de-90c22e28417c License: CC BY 3.0 IGO.”
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