Supplier Relations and Adoption of New Technology: Results of Survey Research in the U.S. Auto Industry

30 Pages Posted: 1 Jul 2000 Last revised: 4 Dec 2020

See all articles by Susan Helper

Susan Helper

Case Western Reserve University - Department of Economics

Date Written: September 1995

Abstract

Using an original data source, this paper investigates the circumstances under which firms adopt computer numerical control (CNC), an important type of flexible automation which can significantly increase productivity, product variety and quality. The paper shows that arms'-length supplier/customer relationships are a significant barrier to CNC adoption, even where CNC would improve efficiency. For firms where CNC would be efficient, but who currently receive little commitment from their customers, an increase in contract length of one year would increase the adoption rate by 30%. These results have theoretical implications in two areas. First, the paper integrates questions of appropriability into the technical change literature, by adding supplier relations as a determinant of technology adoption. Second, the paper extends transaction-cost analysis, by relaxing the assumption that agents' private maximizing behavior will always produce organizational forms that maximize social efficiency.

Suggested Citation

Helper, Susan, Supplier Relations and Adoption of New Technology: Results of Survey Research in the U.S. Auto Industry (September 1995). NBER Working Paper No. w5278, Available at SSRN: https://ssrn.com/abstract=225342

Susan Helper (Contact Author)

Case Western Reserve University - Department of Economics ( email )

Cleveland, OH 44106
United States
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216-368-5542 (Fax)

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