This paper demonstrates how the efficiency of government institutions influences the international adoption of technology among firms. Low government efficiency delays investment in unknown technologies by increasing contracting hazards, environmental uncertainty and the difficulty of allocating potential returns, thus requiring greater experience on the part of firms when undertaking investment decisions. Government inefficiency accentuates the relative significance of firm-specific drivers of technology adoption, but reverses the positive effect of industry competition in promoting adoption. I find empirical support for the above hypotheses in an analysis of the global diffusion of electronic ticketing among airlines.
Available at: http://works.bepress.com/robertogalang/12/