The adoption of new manufacturing technologies: impact on the performance of North American producers of softwood lumber and structural panels
1990
Cohen, D.H. | Sinclair, S.A.
For a firm to remain competitive, it must allocate its limited financial resources into areas that will maintain or improve its performance. One area that always competes for these resources is the adoption of innovative processing technologies in the manufacture of softwood lumber and plywood. Adoption has frequently been discussed, but its impact on a firm's performance has rarely been empirically examined. This paper groups firms based on their adoption of innovative processing technologies and describes characteristics of firms within each group. This technique, using firm controllable variables as clustering criteria, is common in strategic management research. Results from examining 38 firms, responsible for over 30 percent of 1987 North American softwood lumber production and over 70 percent of softwood plywood production provided empirical evidence that increased adoption of innovative processing technologies was linked to superior performance. Companies with high levels of adoption exhibited average to better-than-average levels of profitability and were gaining market share. Firms with low levels of adoption exhibited average and below-average levels of profitability and were losing market share. Firm size and degree of forward vertical integration had no bearing on the degree of process technology adoption. This research gives strong support for lumber and panel producers to allocate financial resources for the development and adoption of innovative processing technologies.
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