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Induced Innovation in Italy: An Error Correction Model for the Period 1968-2002

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  • Baldi, Lucia
  • Casati, Dario

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.

Suggested Citation

  • Baldi, Lucia & Casati, Dario, 2005. "Induced Innovation in Italy: An Error Correction Model for the Period 1968-2002," 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark 24590, European Association of Agricultural Economists.
    • Handle: RePEc:ags:eaae05:24590
    DOI: 10.22004/ag.econ.24590
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    References listed on IDEAS

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