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Adoption cycle of managerial innovation: Effects of innovation social status and transaction costs


Academy of Management Best Papers Proceedings


Strategy and Entrepreneurship

Authors / Editors

Damanpour F;Magelssen C

Publication Year



This study introduces the cycle of adoption of innovation focusing on the decisions to adopt an innovation, abandon a previously adopted innovation (de-adoption), and resume use of a discontinued innovation (re-adoption). We focus on the interplay between rational and institutional explanations and examine the effects of innovation costs and social status on the adoption, de-adoption, and re-adoption of managerial innovation in organizations. We study the adoption cycle of outsourcing 64 public services in local government organizations in the United States with longitudinal panel data from 1982 to 2007. Results suggest that (1) de-adoption and re-adoption decisions commonly occur, (2) the role of innovation social status is more pronounced on the adoption decision, but is mitigated by innovation costs for the de-adoption decision, (3) the influence of transaction costs differ on adoption and de-adoption such that while initial costs affects adoption, operational costs affects de-adoption, and (4) transaction costs temper the influence of social status on adoption and de-adoption, but not on re-adoption. We discuss the implications of these findings for research on the dynamics of adoption of managerial innovation and the varying roles of rational and institutional perspectives on the cycle of adoption of innovation in organizations over time.


Innovation; Legitimacy; Transaction costs

Available on ECCH


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