IDEAS home Printed from https://ideas.repec.org/p/ags/iaae12/126368.html
   My bibliography  Save this paper

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

Author

Listed:
  • 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.

Suggested Citation

  • Wang, Sun Ling & Ball, V. Eldon & Fulginiti, Lilyan E. & Plastina, Alejandro S., 2012. "Benefits of Public R&D in U.S. Agriculture: Spill-Ins, Extension, and Roads," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 126368, International Association of Agricultural Economists.
    • Handle: RePEc:ags:iaae12:126368
    DOI: 10.22004/ag.econ.126368
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/126368/files/ICAE_Brazil_new.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.126368?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. 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.
    2. 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.
    3. Huffman, Wallace E., 2009. "Measuring Public Agricultural Research Capital and Its Contribution to State Agricultural Productivity," Working Papers 55845, Iowa State University, Department of Economics.
    4. Mullen, John D., 2007. "Productivity Growth and the Returns from Public Investment in R&D in Australian Broadacre Agriculture," 2007 Conference (51st), February 13-16, 2007, Queenstown, New Zealand 9451, Australian Agricultural and Resource Economics Society.
    5. David Schimmelpfennig & Colin Thirtle, 1999. "The Internationalization Of Agricultural Technology: Patents, R&D Spillovers, And Their Effects On Productivity In The European Union And United States," Contemporary Economic Policy, Western Economic Association International, vol. 17(4), pages 457-468, October.
    6. Philip G. Pardey & Julian M. Alston & Connie Chan-Kang & Eduardo C. Magalhães & Stephen A. Vosti, 2006. "International and Institutional R&D Spillovers: Attribution of Benefits among Sources for Brazil's New Crop Varieties," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 88(1), pages 104-123.
    7. Alejandro Plastina & Lilyan Fulginiti, 2012. "Rates of return to public agricultural research in 48 US states," Journal of Productivity Analysis, Springer, vol. 37(2), pages 95-113, April.
    8. Jaffe, Adam B, 1986. "Technological Opportunity and Spillovers of R&D: Evidence from Firms' Patents, Profits, and Market Value," American Economic Review, American Economic Association, vol. 76(5), pages 984-1001, December.
    9. 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, July.
    10. Ahearn, Mary Clare, 2003. "Trends in Extension Resources," Amber Waves:The Economics of Food, Farming, Natural Resources, and Rural America, United States Department of Agriculture, Economic Research Service, pages 1-1, April.
    11. Zvi Griliches, 1958. "Research Costs and Social Returns: Hybrid Corn and Related Innovations," Journal of Political Economy, University of Chicago Press, vol. 66(5), pages 419-419.
    12. Cornes,Richard & Sandler,Todd, 1996. "The Theory of Externalities, Public Goods, and Club Goods," Cambridge Books, Cambridge University Press, number 9780521477185.
    13. 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.
    14. Yee, J. & Huffman, Wallace E. & Ahearn, M. & Newson, M., 2002. "Sources of Agricultural Productivity Growth at the State Level, 1960-1993," Staff General Research Papers Archive 5331, Iowa State University, Department of Economics.
    15. Ahearn, Mary Clare & Yee, Jet & Bottum, John S., 2003. "Regional Trends In Extension System Resources," Agricultural Information Bulletins 33787, United States Department of Agriculture, Economic Research Service.
    16. 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 Archive 10431, Iowa State University, Department of Economics.
    17. Zvi Griliches, 1998. "R&D and Productivity: The Econometric Evidence," NBER Books, National Bureau of Economic Research, Inc, number gril98-1, March.
    18. Kaiser, Ulrich, 2002. "Measuring knowledge spillovers in manufacturing and services: an empirical assessment of alternative approaches," Research Policy, Elsevier, vol. 31(1), pages 125-144, January.
    19. Roberto Esposti, 2003. "Public R&D investment and cost structure in Italian agriculture, 1960--1995," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 30(4), pages 509-537, December.
    20. Wallace E. Huffman & Robert E. Evenson, 1992. "Contributions of Public and Private Science and Technology to U.S. Agricultural Productivity," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 74(3), pages 751-756.
    21. 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 Limited, vol. 1(1), pages 9-22, January.
    22. Antle, John M, 1983. "Infrastructure and Aggregate Agricultural Productivity: International Evidence," Economic Development and Cultural Change, University of Chicago Press, vol. 31(3), pages 609-619, April.
    23. 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.
    24. Fuglie, Keith O. & Heisey, Paul W., 2007. "Economic Returns to Public Agricultural Research," Economic Brief 6388, United States Department of Agriculture, Economic Research Service.
    25. John Mullen, 2007. "Productivity growth and the returns from public investment in R&D in Australian broadacre agriculture," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 51(4), pages 359-384, December.
    26. Alejandro Nin Pratt & Bingxin Yu & Shenggen Fan, 2008. "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, September.
    27. 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.
    28. Griliches, Zvi, 1998. "R&D and Productivity," National Bureau of Economic Research Books, University of Chicago Press, edition 1, number 9780226308869, December.
    29. 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.
    30. Wolfram Schlenker & Michael J. Roberts, 2008. "Estimating the Impact of Climate Change on Crop Yields: The Importance of Nonlinear Temperature Effects," NBER Working Papers 13799, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Rao, Xudong & Hurley, Terrance M. & Pardey, Philip G., 2019. "Are agricultural R&D returns declining and development dependent?," World Development, Elsevier, vol. 122(C), pages 27-37.
    2. Hurley, Terrance M. & Pardey, Philip G. & Rao, Xudong & Andrade, Robert S., 2016. "Returns to Food and Agricultural R&D Investments Worldwide, 1958-2015," Briefs 249356, University of Minnesota, International Science and Technology Practice and Policy.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Sun, Ling & Ball, V. Eldon & Fulginiti, Lilyan E. & Plastina, Alejandro S., 2009. "Impact of local public goods on agricultural productivity growth in the U.S," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49333, Agricultural and Applied Economics Association.
    2. Sabasi, Darlington & Shumway, C. Richard, 2014. "Technical Change, Efficiency, and Total Factor Productivity in U.S. Agriculture," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 170225, Agricultural and Applied Economics Association.
    3. Wang, Sun Ling & Heisey, Paul & Schimmelpfennig, David & Ball, Eldon, 2015. "Agricultural Productivity Growth in the United States: Measurement, Trends, and Drivers," Economic Research Report 207954, United States Department of Agriculture, Economic Research Service.
    4. Tokgoz, Simla, 2003. "R&D Spillovers In Agriculture: Results From A North-South Trade Model," 2003 Annual meeting, July 27-30, Montreal, Canada 22258, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    5. Jin, Yu & Huffman, Wallace E., 2013. "Reduced U.S. Funding of Public Agricultural Research and Extension Risks Lowering Future Agricultural Productivity Growth Prospects," Staff General Research Papers Archive 36796, Iowa State University, Department of Economics.
    6. Pardey, Philip G. & Alston, Julian M. & Ruttan, Vernon W., 2010. "The Economics of Innovation and Technical Change in Agriculture," Handbook of the Economics of Innovation, in: Bronwyn H. Hall & Nathan Rosenberg (ed.), Handbook of the Economics of Innovation, edition 1, volume 2, chapter 0, pages 939-984, Elsevier.
    7. Hall, Bronwyn H. & Mairesse, Jacques & Mohnen, Pierre, 2010. "Measuring the Returns to R&D," Handbook of the Economics of Innovation, in: Bronwyn H. Hall & Nathan Rosenberg (ed.), Handbook of the Economics of Innovation, edition 1, volume 2, chapter 0, pages 1033-1082, Elsevier.
    8. Andersen, Matthew A., 2019. "Knowledge productivity and the returns to agricultural research: a review," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 63(2), April.
    9. Huffman, Wallace E. & Evenson, Robert E., 2003. "New Econometric Evidence On Agricultural Total Factor Productivity Determinants: Impact Of Funding Sources," Working Papers 18201, Iowa State University, Department of Economics.
    10. Yee, Jet & Ahearn, Mary Clare & Huffman, Wallace, 2004. "Links among Farm Productivity, Off-Farm Work, and Farm Size in the Southeast," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 36(3), pages 591-603, December.
    11. Yucan Liu & C. Richard Shumway & Robert Rosenman & Virgil Eldon Ball, 2011. "Productivity growth and convergence in US agriculture: new cointegration panel data results," Applied Economics, Taylor & Francis Journals, vol. 43(1), pages 91-102.
    12. Alejandro Plastina & Lilyan Fulginiti, 2012. "Rates of return to public agricultural research in 48 US states," Journal of Productivity Analysis, Springer, vol. 37(2), pages 95-113, April.
    13. Del Bo, Chiara F., 2016. "The rate of return to investment in R&D: The case of research infrastructures," Technological Forecasting and Social Change, Elsevier, vol. 112(C), pages 26-37.
    14. Kingwell, Ross, 2018. "The Rationale for Taxpayer Support for Primary Industry Research and Innovation in Western Australia," Working Papers 274837, University of Western Australia, School of Agricultural and Resource Economics.
    15. Yee, Jet & Huffman, Wallace E., 2001. "Rates Of Return To Public Agricultural Research In The Presence Of Research Spillovers," 2001 Annual meeting, August 5-8, Chicago, IL 20628, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    16. Esposti, Roberto, 2012. "Knowledge, Technology and Innovations for a Bio-based Economy: Lessons from the Past, Challenges for the Future," Bio-based and Applied Economics Journal, Italian Association of Agricultural and Applied Economics (AIEAA), vol. 1(3), pages 1-34, December.
    17. Shumway, C. Richard & Liu, Yucan, 2006. "Induced Innovation in the Agricultural Sector: Evidence From a State Panel," 2006 Annual meeting, July 23-26, Long Beach, CA 21089, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    18. Haschka, Rouven E. & Herwartz, Helmut, 2020. "Innovation efficiency in European high-tech industries: Evidence from a Bayesian stochastic frontier approach," Research Policy, Elsevier, vol. 49(8).
    19. Chiara F. DEL BO, 2014. "The rate of return to investment in R&D infrastructure: an overview," Departmental Working Papers 2014-11, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.
    20. Jintao Zhan & Yubei Ma & Wuyang Hu & Chao Chen & Qinan Lu, 2022. "Enhancing rural income through public agricultural R&D: Spatial spillover and infrastructure thresholds," Review of Development Economics, Wiley Blackwell, vol. 26(2), pages 1083-1107, May.

    More about this item

    Keywords

    Agricultural and Food Policy; Productivity Analysis; Research and Development/Tech Change/Emerging Technologies;
    All these keywords.

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:iaae12:126368. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/iaaeeea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.