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Exploring the impact of R&D and climate change on agricultural productivity growth: the case of Western Australia

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  • Salim, Ruhul A.
  • Islam, Nazrul

Abstract

This article empirically examines the impact of R&D and climate change on the Western Australian Agricultural sector using standard time series econometrics. Based on historical data for the period of 1977–2005, the empirical results show that both R&D and climate change matter for long-run productivity growth. The long-run elasticity of total factor productivity (TFP) with respect to R&D expenditure is 0.497, while that of climate change is 0.506. There is a unidirectional causality running from R&D expenditure to TFP growth in both the short run and long run. Further, the variance decomposition and impulse response function confirm that a significant portion of output and productivity growth beyond the sample period is explained by R&D expenditure. These results justify the increase in R&D investment in the deteriorating climatic condition in the agricultural sector to improve the long-run prospects of productivity growth.

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File URL: http://purl.umn.edu/162054
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Bibliographic Info

Article provided by Australian Agricultural and Resource Economics Society in its journal Australian Journal of Agricultural and Resource Economics.

Volume (Year): 54 (2010)
Issue (Month): 4 (December)
Pages:

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Handle: RePEc:ags:aareaj:162054

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Postal: AARES Central Office Manager, Crawford School of Public Policy, ANU, Canberra ACT 0200
Phone: 0409 032 338
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Related research

Keywords: climate change; cointegration; generalized impulse response function; productivity growth; R&D expenditure; Environmental Economics and Policy; Productivity Analysis; Research and Development/Tech Change/Emerging Technologies;

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