Catching Up, Leapfrogging or Forging Ahead? Exploring the Effects of Integration and History on Spatial Technological Adoptions

This paper introduces a model of localised competition and technological adoption that produces interesting geographical adoption patterns: Persistent asymmetry, where nobody adopts, Leapfrogging where only followers adopt, Forging ahead where only leaders adopt and Catching up where everybody adopts a new technology. We study the conditions leading to the emergence of these adoption patters to interpret the rich and growing empirical literature on intra-distribution mobility across and within regions. We consider a set of linked markets characterised by asymmetric initial technological conditions. We show that these different spatial adoption patterns may provide an interesting reference for the debate on regional convergence, as adoption is an essential engine of growth. We also assess both: the impact of integration policy and of historical asymmetries on these spatial adoption choices and find some counterintuitive results: as for example, that: integration policies may increase regional asymmetries instead than reducing them, depending on the relevance of the initial technology gap between neighbouring firms. The model does not assume different learning abilities or adoption costs between leaders and followers indeed they can all adopt, for the same cost, a new technology leading to global Catching up and convergence. Notwithstanding this possibility, the emerging spatial adoption patterns may still result asymmetric. The main parameters driving the results of the model are: the relevance of the innovation, adoption costs, consumers' preferences for quality, the initial, historically inherited, technology quality asymmetries and transport costs, expressing the degree of within markets competitiveness and differentiation