DO PRICE MECHANISMS FOSTER SUSTAINABLE AGRICULTURAL INNOVATION? EVIDENCE FOR GREEN ECONOMIC TRANSFORMATION

This study examines whether price mechanisms function as effective drivers of sustainable agricultural innovation and contribute meaningfully to green economic transformation. As climate change, resource depletion, and environmental degradation intensify, the agricultural sector faces mounting pressure to transition toward more sustainable and resource-efficient production systems. Price-based instruments—such as subsidies for environmentally friendly technologies, carbon pricing schemes, environmental taxes, and market-oriented incentives—are widely promoted as policy tools to stimulate innovation and accelerate the adoption of sustainable technologies. Nevertheless, empirical evidence regarding their actual effectiveness remains fragmented and inconclusive. Adopting a quantitative research design, this study analyzes the relationship between price incentives and the adoption of sustainable agricultural technologies, including precision farming systems, digital monitoring platforms, climate-smart inputs, and resource-efficient production practices. The empirical analysis evaluates how market signals influence farmers’ investment decisions, innovation intensity, productivity levels, and environmental performance outcomes. In addition, the study incorporates institutional and financial variables to assess moderating effects. The findings indicate that well-structured price mechanisms significantly increase the probability of sustainable technology adoption, enhance farm-level productivity, and reduce negative environmental externalities. However, the strength of this relationship is conditioned by institutional quality, regulatory stability, and access to financial capital. The results suggest that price signals alone are insufficient; their effectiveness depends on complementary governance frameworks and innovation-support infrastructure. By clarifying the channels through which price-based policies promote sustainable innovation, this research contributes to the economics of sustainable development and environmental policy literature. The findings provide actionable insights for policymakers seeking to design integrated strategies that accelerate the transition toward environmentally sustainable, technologically advanced, and economically resilient agricultural systems.