The determinants of technology diffusion: evidence from the UK financial sector

This paper investigates the role of firm and industry-specific factors in the diffusion of automated teller machines (ATMs) in the UK financial sector. A duration model of technology adoption is employed in the empirical modelling and is applied to an annual panel of adoption histories over the period 1972 - 1997. The main factors affecting the diffusion of new technology are found to be endogenous learning, cumulative learning-by-doing effects, firm size, growth and profitability, and price expectations. There is, however, little evidence to support the role of stock effects in the diffusion process. The results are found to be robust across a number of specifications of the baseline hazard function.