Abstract
This chapter provides a complementary analysis on the embedding of firms and its effect on the process of adoption from a spatial perspective. The main objective of this chapter thus is to study the impact of geographical proximity on new technology adoption in the context of Indian Auto component industry. Taking further the analysis of the determinants of adoption, which was the thrust of the preceding chapter, herewith we explicate the diffusion phenomenon in a geographical setting and investigate the facilitative role of proximity (both in the geographical and relational sense) on the adoption of AMTs.
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- 1.
This is defined both in the relational and geographical sense.
- 2.
Advanced manufacturing techniques, also broadly called as ‘flexible automation techniques’, refer to all kinds of microelectronics-based technologies that enable the application of computers in production environments- from the design and materials planning stage, through fabrication and assembly process, the inspection and material-handling stage to the overall process control. AMTs also encompass the ‘soft aspects’ like the ‘advanced management techniques’ (e.g., just-in-time (JIT), total quality management or (TQM) etc).
- 3.
This kind of interaction is also shown to be important and beneficial to the producers (e.g., von Hippel 1988). But this is not elaborated here as our focus is mainly on the users of new technology.
- 4.
This is due to the fact that, the 'balance of power' in adoption rests mostly on the buyer side since a greater commitment and certainty from the buyers makes it possible for the auto component firms to invest in advanced manufacturing technologies.
- 5.
Say, within a radius of 10–20 km.
- 6.
E.g., in all the questions where the firms are required to specify locality vs. both locality and regions they have checked both. This shows that for practical purposes we can combine locality and region in our context.
- 7.
Here the concept of clustering is used to denote the phenomenon of spatial and sectoral agglomeration of similar firms (see Chap. 4 for a discussion of the geographical distribution of the Indian auto component firms).
- 8.
By this we mean similar firms in the industry.
- 9.
In the survey, long term relation was defined as relation lasting ‘longer than 1 year’
- 10.
Precisely for this reason perhaps, the automotive industry is observed to be highly regional in nature not only in India, but in the rest of the world also.
- 11.
We recognise that the use of these variables is a crude way of measuring the relational proximity among firms. However, the choice of these variables is constrained by the lack of a better measure in our data base. To give an instance, the existence of a long- term relation between a firm and its customer has been used in the literature (e.g., Helper 1995) as a proxy for the strength of relations. However, due to perfect collinearity of the variable with the adoption pattern, the same has been dropped from our analysis.
- 12.
- 13.
An elaboration of the use of this criterion and its rationale is discussed already in Chap. 7.
- 14.
Since we are interested in decision to adopt/not adopt (not intensity of adoption) influenced by geographic characteristics, we have used only AMTTHREE (in contrast to both AMTTHREE and AMTINT used in Chap. 8). It seems to make more sense to think that a firm actually decides whether to adopt an AMT based on the influences of proximity variables rather than increase in the ‘intensity’ of AMT use from low to high due to them.
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Diebolt, C., Mishra, T., Parhi, M. (2016). Geographical Proximity and Adoption of AMTS in Indian Auto Components Industry. In: Dynamics of Distribution and Diffusion of New Technology. India Studies in Business and Economics. Springer, Cham. https://doi.org/10.1007/978-3-319-32744-0_9
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