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Impact of local public goods on agricultural productivity growth in the U.S

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

Abstract

In this paper we revisit the issue on the impact of public R&D expenditure on US agricultural productivity growth. We estimate a dual cost function using a state-by-year panel data set. We construct the potential R&D “spillins” based on both geographical location and production mix. We also examine the role of the extension service, transportation network, and human capital in the process of technology dissemination. The results indicate that higher levels of local public goods, R&D spillins, extension activities, and an intensive transportation network decrease costs. The contributions to agricultural productivity from all series of R&D spillins are positive even though the social rate of return may differ.

Suggested Citation

  • 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.
  • Handle: RePEc:ags:aaea09:49333
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    References listed on IDEAS

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    1. 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.
    2. Fuglie, Keith O. & Heisey, Paul W., 2007. "Economic Returns to Public Agricultural Research," Economic Brief 6388, United States Department of Agriculture, Economic Research Service.
    3. Alston, Julian M. & Wyatt, T. J. & Pardey, Philip G. & Marra, Michele C. & Chan-Kang, Connie, 2000. "A meta-analysis of rates of return to agricultural R & D: ex pede Herculem?," Research reports 113, International Food Policy Research Institute (IFPRI).
    4. 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.
    5. Ahearn, Mary Clare, 2003. "Trends in Extension Resources," Amber Waves, United States Department of Agriculture, Economic Research Service, April.
    6. Cornes,Richard & Sandler,Todd, 1996. "The Theory of Externalities, Public Goods, and Club Goods," Cambridge Books, Cambridge University Press, number 9780521477185, March.
    7. 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.
    8. 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.
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    Keywords

    productivity; public R&D expenditure; cost function; extension services; Productivity Analysis; Research and Development/Tech Change/Emerging Technologies; O3; O4;

    JEL classification:

    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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