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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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  • Ruhul A. Salim
  • Nazrul Islam

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. Copyright 2010 The Authors. AJARE 2010 Australian Agricultural and Resource Economics Society Inc. and Blackwell Publishing Asia Pty Ltd.

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  • Ruhul A. Salim & Nazrul Islam, 2010. "Exploring the impact of R&D and climate change on agricultural productivity growth: the case of Western Australia ," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 54(4), pages 561-582, October.
    • Handle: RePEc:bla:ajarec:v:54:y:2010:i:4:p:561-582
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    2. Potts, Jason & Kastelle, Tim, 2017. "Economics of innovation in Australian agricultural economics and policy," Economic Analysis and Policy, Elsevier, vol. 54(C), pages 96-104.
    3. Khan, Farid & Salim, Ruhul, 2015. "The Public R&D and Productivity Growth in Australian Broadacre Agriculture: A Cointegration and Causality Approach," 2015 Conference (59th), February 10-13, 2015, Rotorua, New Zealand 204432, Australian Agricultural and Resource Economics Society.
    4. Tim Lefroy & James Key, 2018. "Determinants of Broadacre Farming Efficiency in Western Australia: A Stochastic Frontier Analysis," Economic Papers, The Economic Society of Australia, vol. 37(2), pages 180-196, June.
    5. Chandio, Abbas Ali & Jiang, Yuansheng & Ahmad, Fayyaz & Adhikari, Salina & Ain, Qurat Ul, 2021. "Assessing the impacts of climatic and technological factors on rice production: Empirical evidence from Nepal," Technology in Society, Elsevier, vol. 66(C).
    6. Bannor, Frank & Dikgang, Johane & Kutela Gelo, Dambala, 2021. "Interdependence between research and development, climate variability and agricultural production: evidence from sub-Saharan Africa," MPRA Paper 105697, University Library of Munich, Germany.
    7. Sanzidur Rahman & Asif Reza Anik & Jaba Rani Sarker, 2022. "Climate, Environment and Socio-Economic Drivers of Global Agricultural Productivity Growth," Land, MDPI, vol. 11(4), pages 1-17, April.
    8. C. J. O’Donnell, 2021. "Estimating the Effects of Weather and Climate Change on Agricultural Productivity," CEPA Working Papers Series WP032021, School of Economics, University of Queensland, Australia.
    9. Islam, Nazrul & Xayavong, Vilaphonh & Kingwell, Ross, 2014. "Broadacre farm productivity and profitability in south-western Australia," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 58(2), April.
    10. Bannor, Frank & Dikgang, Johane & Gelo, Dambala, 2021. "Agricultural total factor productivity growth, technical efficiency, and climate variability in sub-Saharan Africa," EconStor Preprints 231310, ZBW - Leibniz Information Centre for Economics.
    11. Muhammad Usman & Gulnaz Hameed & Abdul Saboor & Lal K. Almas & Muhammad Hanif, 2021. "R&D Innovation Adoption, Climatic Sensitivity, and Absorptive Ability Contribution for Agriculture TFP Growth in Pakistan," Agriculture, MDPI, vol. 11(12), pages 1-18, November.
    12. Antonio Peyrache & Maria C. A. Silva, 2021. "Multi-Level Parallel Production Networks," CEPA Working Papers Series WP052021, School of Economics, University of Queensland, Australia.
    13. Mirela Stoian & Raluca Andreea Ion & Vlad Constantin Turcea & Ionut Catalin Nica & Catalin Gheorghe Zemeleaga, 2022. "The Influence of Governmental Agricultural R&D Expenditure on Farmers’ Income—Disparities between EU Member States," Sustainability, MDPI, vol. 14(17), pages 1-14, August.
    14. Muhammad Haseeb & Sebastian Kot & Hafezali Iqbal Hussain & Kittisak Jermsittiparsert, 2019. "Impact of Economic Growth, Environmental Pollution, and Energy Consumption on Health Expenditure and R&D Expenditure of ASEAN Countries," Energies, MDPI, vol. 12(19), pages 1-21, September.

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