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Research Investment and the Economic Returns To Chinese Agricultural Research

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  • Shenggen Fan

Abstract

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

Suggested Citation

  • Shenggen Fan, 2000. "Research Investment and the Economic Returns To Chinese Agricultural Research," Journal of Productivity Analysis, Springer, vol. 14(2), pages 163-182, September.
    • Handle: RePEc:kap:jproda:v:14:y:2000:i:2:p:163-182
    DOI: 10.1023/A:1007803108805
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    References listed on IDEAS

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    1. Fan, Shenggen & Pardey, Philip G., 1992. "Agricultural Research in China: Its Institutional Development and Impact," ISNAR Archive 310666, CGIAR > International Food Policy Research Institute (IFPRI).
    2. Philip G. Pardey & Barbara Craig, 1989. "Causal Relationships between Public Sector Agricultural Research Expenditures and Output," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 71(1), pages 9-19.
    3. Alston, Julian M. & Marra, Michele C. & Pardey, Philip G. & Wyatt, T.J., 2000. "Research returns redux: a meta-analysis of the returns to agricultural R&D," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 44(2), pages 1-31.
    4. Lau, Lawrence J. & Yotopoulos, Pan A., 1989. "The meta-production function approach to technological change in world agriculture," Journal of Development Economics, Elsevier, vol. 31(2), pages 241-269, October.
    5. 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.
    6. Lin, Justin Yifu, 1992. "Rural Reforms and Agricultural Growth in China," American Economic Review, American Economic Association, vol. 82(1), pages 34-51, March.
    7. Shenggen Fan, 1991. "Effects of Technological Change and Institutional Reform on Production Growth in Chinese Agriculture," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 73(2), pages 266-275.
    8. 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.
    9. 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.
    10. Pardey, Philip G. & Roseboom, Johannes & Anderson, Jock R., 1991. "Agricultural Research Policy: International Quantitative Perspectives," ISNAR Archive 310674, CGIAR > International Food Policy Research Institute (IFPRI).
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