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Benefits of Public R&D in U.S. Agriculture: Spill-Ins, Extension, and Roads

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  • Wang, Sun Ling
  • Ball, V. Eldon
  • Fulginiti, Lilyan E.
  • Plastina, Alejandro S.

Abstract

This paper uses panel data for the 1980-2004 period to estimate the contributions of public research to U.S. agricultural productivity growth. Local and social internal rates of return are estimated accounting for the effects of R&D spill-in, extension activities and road density. R&D spill-in proxies were constructed based on both geographic proximity and production profile to examine the sensitivity of the rates of return to these alternatives. We find that extension activities, road density, and R&D spill-ins, play an important role in enhancing the benefit of public R&D investments. We also find that the local internal rates of return, although high, have declined through time along with investments in extension, while the social rates have not. Yet, the social rates of return are not robust to the choice of spill-in proxy.

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Paper provided by International Association of Agricultural Economists in its series 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil with number 126368.

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Date of creation: 2012
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Handle: RePEc:ags:iaae12:126368

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Keywords: productivity; public R&D; R&D spill-ins; extension; road density; internal rate of return; cost function.; Agricultural and Food Policy; Productivity Analysis; Research and Development/Tech Change/Emerging Technologies; Q16; O3; O4;

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  1. Huffman, Wallace E. & Ball, E. & Gopinath, M. & Somwaru, A., 2002. "Public R&D and Infrastructure Policies: Effects on Cost of Midwestern Agriculture," Staff General Research Papers 10431, Iowa State University, Department of Economics.
  2. Huffman, Wallace, 2009. "Measuring Public Agricultural Research Capital and Its Contribution to State Agricultural Productivity," Staff General Research Papers 13123, Iowa State University, Department of Economics.
  3. Wolfram Schlenker & Michael J. Roberts, 2006. "Estimating the impact of climate change on crop yields: The importance of non-linear temperature effects," Discussion Papers 0607-01, Columbia University, Department of Economics.
  4. Roberto ESPOSTI & Pierpaolo PIERANI, 2002. "Public R&D Investment and Cost Structure in Italian Agriculture 1960-1995," Working Papers 176, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
  5. Alston, Julian M. & Pardey, Philip G. & Chan-Kang, Connie & Magalhaes, Eduardo Castelo & Vosti, Stephen A., 2004. "International And Institutional R&D Spillovers: Attribution Of Benefits Among Sources For Brazil'S New Crop Varieties," Staff Papers 14017, University of Minnesota, Department of Applied Economics.
  6. Daniel K. N. Johnson & Robert E. Evenson, 1999. "R&D Spillovers To Agriculture: Measurement And Application," Contemporary Economic Policy, Western Economic Association International, vol. 17(4), pages 432-456, October.
  7. Alejandro Nin Pratt & Bingxin Yu & Shenggen Fan, 2009. "The total factor productivity in China and India: new measures and approaches," China Agricultural Economic Review, Emerald Group Publishing, vol. 1(1), pages 9-22, February.
  8. Levin, Andrew & Lin, Chien-Fu & James Chu, Chia-Shang, 2002. "Unit root tests in panel data: asymptotic and finite-sample properties," Journal of Econometrics, Elsevier, vol. 108(1), pages 1-24, May.
  9. Alan McCunn & Wallace E. Huffman, 2000. "Convergence in U.S. Productivity Growth for Agriculture: Implications of Interstate Research Spillovers for Funding Agricultural Research," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(2), pages 370-388.
  10. V. Eldon Ball & Frank M. Gollop & Alison Kelly-Hawke & Gregory P. Swinand, 1999. "Patterns of State Productivity Growth in the U.S. Farm Sector: Linking State and Aggregate Models," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(1), pages 164-179.
  11. Colin Thirtle & Jenifer Piesse & David Schimmelpfennig, 2008. "Modeling the length and shape of the R&D lag: an application to UK agricultural productivity," Agricultural Economics, International Association of Agricultural Economists, vol. 39(1), pages 73-85, 07.
  12. Alejandro Onofri & Lilyan Fulginiti, 2008. "Public inputs and dynamic producer behavior: endogenous growth in U.S. agriculture," Journal of Productivity Analysis, Springer, vol. 30(1), pages 13-28, August.
  13. Cornes,Richard & Sandler,Todd, 1996. "The Theory of Externalities, Public Goods, and Club Goods," Cambridge Books, Cambridge University Press, number 9780521477185, October.
  14. Esposti, Roberto, 2002. "Public agricultural R&D design and technological spill-ins: A dynamic model," Research Policy, Elsevier, vol. 31(5), pages 693-717, July.
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