If, for example, the cost is paid by hiring labor in a setting with a fixed labor supply, then the rise in the real wage that ensues from an opening of trade spells an increase in the cost of technology adoption and a fall in the rate of diffusion. If,
instead, the cost is paid in units of the final good, then the widening of the gap in relative profitability between high and low productivity firms encourages a speed-up in diffusion.