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European Review of Agriculture Economics Vol 27 (3) (2000) pp.365-384
© 2000 Oxford University Press and the Foundation for the European Review of Agricultural Economics

The impact of public R&D and extension expenditure on Italian agriculture: an application of a mixed parametric-nonparametric approach

R Esposti

University of Ancona, Ancona, Italy

Summary

The paper analyses technical change in Italian agriculture, focusing both on the effects of public R&D-extension investments and on the induced innovation hypothesis. A mixed parametric-nonparametric approach is used. First, in a multi-output framework, technical change is depicted in the form of 'netput augmentation' through a non-parametric general description of the production set. Then a parametric dynamic relationship between netput augmentation, public R&D-extension investments and changes in relative prices is specified. The empirical analysis shows that the main impact of public R&D and extension investment in Italian agriculture is on capital use and animal products. A crucial role is played by market mechanisms through induced innovation.

Keywords: technical change, parametric-nonparametric approach, Italian agriculture


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