Taking 'Some' of the Mimicry Out of the Adoption Process: Quality-Management and Strategic Substitution

40 Pages Posted: 29 Nov 2016

See all articles by Joseph A. Clougherty

Joseph A. Clougherty

University of Illinois at Urbana-Champaign

Michal Grajek

ESMT European School of Management and Technology

Oz Shy

Federal Reserve Banks - Federal Reserve Bank of Atlanta

Date Written: November 2016

Abstract

Operations management scholarship has focused on reference-group adoption positively influencing focal-facility adoption; i.e., positive imitation parameters manifest due to the presence of mimicry and contagion. We instead argue that the incentive to adopt a quality-management system can be inversely related to reference-group diffusion. Our theoretical model formalizes the potential for strategic substitution and negative imitation parameters to be applicable in quality-management adoption. We compile a data set of 2,895 facility-level observations that allows for three different industry-level reference groups; i.e., domestic industry, domestic exporters and foreign exporters. When undertaking probit estimations that do not account for appropriate fixed effects, we find positive imitation parameters which support the presence of mimicry and contagion. Yet when accounting for fixed effects, the imitation parameters turn negative in line with the presence of strategic substitution. Furthermore, the negative influence of reference-group adoption on focal-facility adoption is robust across the three reference groups.

Keywords: adoption, contagion, mimicry, quality management, standards

Suggested Citation

Clougherty, Joseph A. and Grajek, Michal and Shy, Oz, Taking 'Some' of the Mimicry Out of the Adoption Process: Quality-Management and Strategic Substitution (November 2016). CEPR Discussion Paper No. DP11661. Available at SSRN: https://ssrn.com/abstract=2877266

Joseph A. Clougherty (Contact Author)

University of Illinois at Urbana-Champaign ( email )

1206 S. Sixth Street
350 Wohlers Hall, MC-706
Champaign, IL 61820
United States

Michal Grajek

ESMT European School of Management and Technology ( email )

Schlossplatz 1
Berlin, 10178
Germany

Oz Shy

Federal Reserve Banks - Federal Reserve Bank of Atlanta ( email )

1000 Peachtree Street N.E.
Atlanta, GA 30309-4470
United States

HOME PAGE: http://https://www.frbatlanta.org/research/economists/shy-oz.aspx

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