The diffusion of industrial technology through its principal agents (firms) can have far-reaching effects on factor productivity, economic growth, and inflation in a market-oriented economy. Because of this, studies have sought to discover the conditions most favorable to technically-progressive decisions by individual firms. This paper, by exploring some important empirical relationships affecting the propensity of American textile mills to purchase textile machinery innovations in the postwar period, offers the opportunity to discover additional insights into the area from a new and extensive body of industry data, as well as to verify (or disavow) some earlier findings where economists have had only limited observations and industries to study. Moreover, a unique exposure to the process is provided by conducting an examination of a traditional, fragmented industry rather than the usual hightechnology, capital-intensive industry. The analysis begins by relating some important economic attributes of firms to decisions regarding adoption, and the timing of adoption, of thirty-three textile machinery innovations. The often dominating firm-size factor is examined along with the firm's competitive environment, its labor costs, and its foreign activity involvement. The paper then estimates the concentration of progressive behavior in textiles to determine if the same firms have repeatedly been the pioneers. This concentration is contrasted with experiences established in other industries. Finally, the timing of overall industry adoption is related to the industry's business cycle, to determine where in the cycle it is typical for firms to proceed with modernization efforts

The notion that the cost of increasing family size depends upon the level of expenditures or investment per child (child quality), formalized in Becker and Lewis (1973) and Willis (1973), provides a rationale for the contemporaneous inter-country negative correlation between the schooling attainment of young persons and birth rates as well as the trends in these variables over time in developed countries during their demographic transition.A sufficient condition for fertility to fall and, say, schooling to rise as development proceeds in this framework is that the shadow-price constant income effect on quality per child 1 exceed that on numbers of children.Such an explanation, however, would appear :..o be of little value for those who hold that population growth itself impedes economic development (e.g., Coale and Hoover (1958)).From this perspective, the compensated substitution.implications of the theory are of concern, whereby price interventions which impinge on family size decisions can be used to accelerate pe~-capita income.The chief focus of policies aimed at reducing fertility in the absence of income growth appears to be on altering the "own" price of children through lowering information costs associated with contraceptive methdos in order to take advantage of recent innovations in birth control technolo~y.In this paper, we examine both theoretically and empirically the natalist impact of two alternative potential policies--reductions in the price of schooling and tech~ological innovation in the agricltural context--based on a rural household model in which (school) investments per child influence the cost of children as in the Becker-Lewis framework and in which the returns to schooling rise in a dynamic environment as a consequence of the allocative effect of education (Welch, 1970;Schultz, 1975).I show that, as a consequence of the "quantity-quality" interaction, reductions in the direct costs of schooling may raise fertility levels even if child schooling and the quantity of children are substitutes as conventionally defined and even if (observed) income effects are not positive.2,:. w