Technology adoption and the emergence of regional asymmetries

The model explains the emergence of asymmetric productive structures among regions based on adoption of a quality improving technology. Firms' product s are differentiated both in location and quality, location is given. We ch aracterize symmetric and asymmetric equilibria of the two stage game in pri ce and adoption. Asymmetric equilibria display partial adoption frequencies and regular geographical patterns of adoptions. The asymmetry of the econo my has, often, a reverse U-shaped relation with the innovation size. Market integration is an obstacle for the full adoption of the new technology and favours the emergence of regional asymmetries.