In this work we utilise CES approach where factor ratios (mechanical power/labour and fertilizer/land) are regressed on price ratios and efficiency parameters (public and private R&D) to obtain a direct test of the induced innovation in Italian case for the period 1968-2002. Provided that inducement hypothesis implies a long run relationship an error correction model (ECM) is estimated to separate long-run effect, that is technological innovation, from short-run effects, that is factors substitution. The results corroborate the induced innovation hypothesis and underline the importance of private R&D in Italian agriculture.
Induced innovation in Italy : an error correction model for the period 1968-2002 / L. Baldi, D. Casati - In: EAAE Congress The future of rural Europe in the global agri-food system / [a cura di] S. Rasmussen. - [s.l] : KWL - Food and Resource Economic Institute, 2005 Aug. - pp. 1-13 (( Intervento presentato al 11. convegno The future of rural Europe in the global agri-food system tenutosi a Copenhagen, Denmark nel 2005.
Induced innovation in Italy : an error correction model for the period 1968-2002
L. Baldi;D. Casati
2005
Abstract
In this work we utilise CES approach where factor ratios (mechanical power/labour and fertilizer/land) are regressed on price ratios and efficiency parameters (public and private R&D) to obtain a direct test of the induced innovation in Italian case for the period 1968-2002. Provided that inducement hypothesis implies a long run relationship an error correction model (ECM) is estimated to separate long-run effect, that is technological innovation, from short-run effects, that is factors substitution. The results corroborate the induced innovation hypothesis and underline the importance of private R&D in Italian agriculture.
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