An Analysis of Technology Adoption by Export-oriented Manufacturers in Pakistan.

Abstract

This paper analyses the issue of technology adoption by export-oriented enterprises based on survey data. Using the Rank Model of technology adoption, the paper explores the role of several firm level characteristics that can influence firm’s decision to adopt new technology. The results show that younger and bigger firms have a higher probability of technology adoption. Firms that have obtained certifications to product and process standards demonstrate a higher likelihood of technology adoption. Domestically-owned firms are found to have a higher probability of technology adoption as compared with foreign-owned firms. The empirical findings underscore the need for policy options to encourage export-oriented enterprises to adopt new technology including, for example, fiscal incentives to encourage research and development activities, and up-gradation of physical infrastructure for product testing to facilitate certifications. JEL classification: C25, L60, O14 Keywords: Manufacturing Industries, Probit Model, Technology Adoption.