“Globalization”: Modeling Technology Adoption Timing Across Countries

We study global adoption processes where the units of observation are countries which sequentially adopt a particular innovation. Our goal is to provide a better understanding of how exogenous and endogenous country characteristics affect this diffusion process. We develop a general model of global adoption processes that allows researchers to test extant theories of cross-country adoption, and illustrate the approach using data from the cellular telephone industry for 184 countries. In our application, we find support for the existence of a global “demonstration effect”: as the number of countries adopting the technology becomes larger, the likelihood of “similar” countries following their example increases. We also find that isolated economies lag in adopting technologies, and that countries with homogenous and concentrated populations, and with a high level of economic development are, on average, earlier adopters. Finally, our model supports the managerial intuition that, eventually, all countries will adopt cellular technology.