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Research Investment and the Economic Returns To Chinese Agricultural Research

  • Shenggen Fan

This article measureseconomic returns to research investment in Chinese agricultureusing the production function approach. A stock-of-knowledgevariable constructed from the past research investment is directlyincluded in the production function as an explanatory variablein the production function. Improved rural infrastructure, irrigation,and education are also included as explanatory variables to avoidthe upward bias in the estimates of returns to agricultural research.A two-way variable coefficients technique is used in the estimationto reduce estimation biases due to the remaining measurementand omitted variables problems. Sensitivity analyses are conductedto test the effects of various lag structures on the return estimates.The results show that rates of return to research investmentin Chinese agriculture are high, ranging from 36% to 90% in1997, and the rates are increasing over time. Copyright Kluwer Academic Publishers 2000

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File URL: http://hdl.handle.net/10.1023/A:1007803108805
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Article provided by Springer in its journal Journal of Productivity Analysis.

Volume (Year): 14 (2000)
Issue (Month): 2 (September)
Pages: 163-182

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Handle: RePEc:kap:jproda:v:14:y:2000:i:2:p:163-182
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  1. Lin, Justin Yifu, 1991. "Public Research Resource Allocation in Chinese Agriculture: A Test of Induced Technological Innovation Hypotheses," Economic Development and Cultural Change, University of Chicago Press, vol. 40(1), pages 55-73, October.
  2. Fan, Shenggan & Pardey, Philip G., 1997. "Research, productivity, and output growth in Chinese agriculture," Journal of Development Economics, Elsevier, vol. 53(1), pages 115-137, June.
  3. Lin, Justin Yifu, 1992. "Rural Reforms and Agricultural Growth in China," American Economic Review, American Economic Association, vol. 82(1), pages 34-51, March.
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