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The Process of an Innovation Cycle


  • Kislev Yoav
  • Nira Shchori-Bachrach


An economic theory of the process of diffusion of innovations is developed and illustrated. In the theory, adoption is determined by comparative advantage considerations. An innovation is first adopted by skilled and experimenting entrepreneurs and then "diffuses" down the skills scale. If the innovation affects supply substantially, prices may decline, profits eliminated, and early, skilled (and high labor opportunity cost) producers may exit from the affected line of production—hence, an "innovation cycle." The theory implies that technological change is affected by the distribution as well as by the average level of skills.

Suggested Citation

  • Kislev Yoav & Nira Shchori-Bachrach, 1973. "The Process of an Innovation Cycle," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 55(1), pages 28-37.
  • Handle: RePEc:oup:ajagec:v:55:y:1973:i:1:p:28-37.

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    Cited by:

    1. Kimhi, Ayal & Rubin, Ofir D., 2006. "Assessing The Response Of Farm Households To Dairy Policy Reform In Israel," Discussion Papers 7134, Hebrew University of Jerusalem, Department of Agricultural Economics and Management.
    2. Enid Katungi & Svetlana Edmeades & Melinda Smale, 2008. "Gender, social capital and information exchange in rural Uganda," Journal of International Development, John Wiley & Sons, Ltd., vol. 20(1), pages 35-52.
    3. Jabbar, Mohammad A. & Beyene, Hailu & Mohamed Saleem, M A & Gebreselassie, Solomon, 1998. "Adoption pathways for new agricultural technologies : An approach and an application to Vertisols management technology in Ethiopia," Research Reports 182901, International Livestock Research Institute.
    4. Peterson, Willis L. & Hayami, Yujiro, 1977. "Technical Change in Agriculture," A Survey of Agricultural Economics Literature, Volume 1: Traditional Fields of Agricultural Economics 1940s to 1970s, Agricultural and Applied Economics Association.
    5. Peterson, Willis L. & Fitzharris, Joseph C., 1974. "The Organization And Productivity Of The Federal - State Research System In The United States," Staff Papers 13957, University of Minnesota, Department of Applied Economics.
    6. Blackman, Allen, 1999. "The Economics of Technology Diffusion: Implications for Climate Policy in Developing Countries," Discussion Papers dp-99-42, Resources For the Future.
    7. Rae, Allan N. & Carman, Hoy F., 1975. "A Model Of New Zealand Apple Supply Response To Technological Change," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 19(1), pages 1-13, April.
    8. Teigen, Lloyd D., 1988. "Agricultural Policy, Technology Adoption, and Farm Structure," Staff Reports 278118, United States Department of Agriculture, Economic Research Service.
    9. Kim, Tae-Kyun, 1989. "The factor bias of technical change and technology adoption under uncertainty," ISU General Staff Papers 1989010108000010138, Iowa State University, Department of Economics.
    10. Rahm, Michael Robert, 1980. "An economic analysis of the corn production efficiency of Iowa farm firms," ISU General Staff Papers 198001010800008119, Iowa State University, Department of Economics.
    11. Blackman, Allen, 1999. "The Economics of Technology Diffusion: Implications for Climate Policy in Developing Countries," Discussion Papers 10574, Resources for the Future.
    12. Shi Zheng & Pei Xu & Zhigang Wang, 2012. "Farmers' adoption of new plant varieties under variety property right protection: Evidence from rural China," China Agricultural Economic Review, Emerald Group Publishing, vol. 4(1), pages 124-140, January.
    13. repec:eee:wdevel:v:105:y:2018:i:c:p:286-298 is not listed on IDEAS
    14. Singh, Kehar, 2005. "Decomposition of Economic Efficiency under Risk into Technical and Allocative Risks: A Study on Fish Production in South Tripura District, Tripura, India," Agricultural Economics Research Review, Agricultural Economics Research Association (India), vol. 18(Conferenc), pages 1-9.

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