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Innovation for climate change adaptation and technical efficiency: an empirical analysis in the European agricultural sector

Sabrina Auci (), Nicolò Barbieri (), Manuela Coromaldi () and Donatella Vignani ()
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Nicolò Barbieri: University of Ferrara and SEEDS (Sustainability, Environmental Economics and Dynamics Studies)
Manuela Coromaldi: University of Rome “Niccolò Cusano”
Donatella Vignani: ISTAT, Italian National Institute of Statistics

Economia Politica: Journal of Analytical and Institutional Economics, 2021, vol. 38, issue 2, No 8, 597-623

Abstract: Abstract This paper analyses the effect of innovation on firms’ technical efficiency. Using climate-related patent data to proxy for innovation activity in different technological fields, the paper employs a stochastic frontier approach to estimate the impact of innovative efforts on agricultural firms’ technical efficiency taking account of both unobservable heterogeneity and double heteroscedasticity in the inefficiency and idiosyncratic terms. Our findings confirm that innovation has a positive impact on firms’ productivity (technical efficiency). While agricultural firms located in Germany and Sweden are more efficient compared to those in southern countries, all the European countries considered are distant from the maximum production frontier. This leaves room for governments to design economically sustainable agriculture policies, incentivize firms and foster technological innovation to achieve adaptations to present and future changes in climate.

Keywords: Agriculture; Adaptation; Climate-related patent; Stochastic frontier approach (search for similar items in EconPapers)
JEL-codes: O3 Q12 Q16 (search for similar items in EconPapers)
Date: 2021
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DOI: 10.1007/s40888-020-00182-9

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