Agricultural and biotechnology patents as an adaptation strategy to climate change: A regional analysis of European farmer's efficiency

Abstract

This chapter analyses the effect of innovation encouraged by climate change challenges on European farmers’ technical efficiency. Using the stochastic frontier approach, we estimate the impact of agri-cultural patents on farmers’ technical efficiency by taking into account both unobservable heterogeneity and heteroscedasticity in the inefficiency term. Our findings suggest that European farmers remain quite far from the maximum frontier and irrespective of the country in which they reside; farmers who innovate are more efficient than those who do not. Thus, the inefficiency of agricultural agents in the European context leaves space for policies that incentivise firms to adopt climate change adaptation strategies through technological innovation.