The extensions of the time series analysis to four additional countries
and of the time series and cross-section analysis to 1970 adds importantly
to our understanding of the interrelationships among changes in
relative factor prices, technical change, productivity growth, and agricultural
development. The initial test of the induced innovation hypothesis
was based on the historical experience of agricultural productivity
growth in two countries—the United States and Japan—with extreme
differences in relative factor endowments and factor prices. The addition
of the four European countries permits a test of the induced innovation
hypothesis against the experience of countries characterized by less extreme
differences in relative factor endowments and prices.