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This study primarily aimed to contrast the potential relationships between innovation and market concentration. Thus, the relationship between innovation and the European wood industry market structure was analysed. An empirical model was assessed through panel techniques, wherein the wood industry market structure was explained through business-related variables and additional variables associated with generating innovation. The primary conclusion of this study with respect to the European wood industry is that R&D spending and R&D personnel are key factors in explaining market concentration. However, the influence of these variables may be affected by the initial degree of market concentration in the industry.

This paper uses a logit model to quantify the probability of generating technological innovations in a representative sample of firms belonging to the wood-based industry in Spain (lumber and wood products, pulp and paper, and wooden furniture). Special attention has been paid to the incidence of environmental and quality strategies in firms as being determinant factors of innovation. Econometric results have indicated that these two strategies have increased innovation generation in the wood-based industry. In general, environmental and quality strategies tend to exert positive effects on the specific innovation activities of firms, in spite of the fact that a substitution relationship was found between the existence of quality management systems and R&D subsidies.

This paper intends to analyze the relationship between productive efficiency and innovation activity in Spain's wood-based industry. The methodology includes two levels of analysis. First, a non-parametric technique (data envelopment analysis, DEA) is applied with several inputs and outputs associated to economic and financial data. In a second stage, a logistic regression model explores the relationship between the property of efficiency and innovation activity indicators. This approach is used to analyze a set of firms in the following sectors: lumber and wood products, pulp and paper and wood furniture. Results do not show the existence of significant links between firm's efficiency and innovation activities. This outcome is consistent with a low firm priority toward R&D as a means to achieve competitiveness and an innovation strategy followed by many Spanish firms based on the acquisition of embodied technology available in international markets. In order to improve competitiveness in the long run, efforts should be made by Spanish wood-based firms to increase their production of in-house technologies.

Current EC nitrogen legislation stipulates for the non-sensitive areas a preventive approach via the development of ‘best management practices’ (BMPs) within a context of voluntary implementation. Under existing technologies, the adoption of BMPs leads to economic losses. A crop simulation model (NTRM) and a mathematical mixed multi-objective programming model (NISE) are used to assess the effects of nitrogen price increase and drainage water reduction in inducing adoption of BMPs. The model shows that increasing nitrogen price cannot be used to stimulate farmers to adopt BMPs. On the other hand, imposing a tax on drainage water could lead to a reduction of up to 37% on the quantity of nitrogen leached with a decreased of only 1·5% in gross margin. However, above this level, drainage water is no longer a useful instrument to reduce and control nitrogen losses, and could lead to inefficient solutions in terms of gross margin and nitrates pollution.

This study presents a methodology to assess on-farm costs of reducing nitrogen leachate through ‘best management practices’ (BMP). A simulation as well as a linear multi-objective programming model was used linking environmental and economic data. The Non-Inferior Set Estimation method is used to generate the extreme efficient pts for the problem considered. The BMP for every level of admissible nitrogen pollution are elicited. Results show that the adoption of the BMP may lead to considerable economic losses for farmers. This implies that the BMP will not be accepted by farmers unless targeted subsidies are allocated to avoid their incurring losses. The methodology used in this paper provides a powerful instrument to link economic to environmental objectives. However, the sensitivity of the results to the type of crops considered as well as to weather and soil conditions should be kept in mind.