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Refining Returns To Research And Development In South African Commercial Agriculture

Author

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  • Khatri, Y.
  • Schimmelpfennig, D.
  • Thirtle, C.
  • van Zyl, J.

Abstract

Use ofa long-run profit function provides accurate estimates of returns to agricultural R&D in Europe and North America, a result that is tied to the long term basic and applied nature of the research institutions in these areas. Agricultural R&D in South Africa is fundamentally different with a more adaptive character, resulting in a shorter lag of five years between research spending and changes in TFP. In this situation, the long-run profit function input demand and output supply elasticities are too high, resulting in overestimation of returns to R&D. A potential solution to this problem is to use a short-run profit function in the calculation of returns to R&D. Several other inputs are held fixed and the result is a short-run return to R&D in South Africa that compares favourably with long-run return levels that have been established for the northern hemisphere.

Suggested Citation

  • Khatri, Y. & Schimmelpfennig, D. & Thirtle, C. & van Zyl, J., 1996. "Refining Returns To Research And Development In South African Commercial Agriculture," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 35(4), December.
    • Handle: RePEc:ags:agreko:267988
    DOI: 10.22004/ag.econ.267988
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    References listed on IDEAS

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    Cited by:

    1. Ortmann, Gerald F., 2005. "Promoting the competitiveness of South African agriculture in a dynamic economic and political environment," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 44(3), pages 1-35, September.

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