Modeling the Efficiency of Operating Costs in Introducting Innovations in the Agrarian Sphere: Efficiency of Innovations in Crop Production

Modeling the Efficiency of Operating Costs in Introducting Innovations in the Agrarian Sphere: Efficiency of Innovations in Crop Production

Oleksandr Oliinyk, Tamila Oliynik, Vitaly Makogon, Svitlana Brik
Copyright: © 2023 |Pages: 12
DOI: 10.4018/IJITPM.323208
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Abstract

The purpose of the work is to demonstrate the results of modeling the impact of innovation on the efficiency of operating costs for crop production by agricultural enterprises. Based on the dialectical method of cognition, abstract-logical, and graphic methods were used; nonlinear correlation-regression analysis and economic-mathematical modeling It is established that the innovations of technical and technological character contribute to the increase of the extremum of the yield function. At the same time, the impact of innovation on the profit function is twofold. In the case of free product innovation, an increase in output estimated at market prices generates an increase in the extremum of the profit function while increasing the profit optimum of costs. That is why the latter is approaching the technological optimum. In turn, the innovation payoff affects the profit curve, reducing the value of the cost optimum and the function extremum. However, a significant increase in the cost of an innovative product can lead to a decrease in profit below the achieved level.
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Literature Review Innovation Implementation Modeling

Agro-innovations refer to the introduction to use a new or significantly improved product (goods, service), new methods of sale or organization of business practices, the organization of jobs or external relations (Oslo Manual, 2005). The study of the methodological foundations of innovative activity showed that its theoretical basis was laid in the works of J. Schumpeter, J. Dunning, and R. Lucas. The focus of the research vector on the “productivity paradox” of innovations, including information technology, shows that their implementation undermines transformations in the activities of economic entities, such as new business processes, new skills, organizational and industry structures, ways of organizing production (Brinolfsson E. & Heath L.M., 2000). Today, the issue of the impact of the innovations on economic development has been given attention in the works by C. Edquist (1997; 2001), K. Dalman (1995), R. Nelson (1993; 1995), Shu Lin Gu (1999), K. Freeman (1987), B.O. Lundwall (1987), M. Gertler (2004), B. Asheim (2004; 2002), A. Isaxen (2002), F. Cook (1998; 2003), K.J. Morgan (1998), V. Babenko (2018), N. Davidenko (2019), S. Ramazanov (2019), A.B. Memon (2017) and others.

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