The Effect of Innovation on Agricultural and Agri-food Exports in OECD Countries

Pascal L. Ghazalian and W. Hartley Furtan

Journal of Agricultural and Resource Economics, 2007, vol. 32, issue 03

Abstract: This paper investigates the effect of innovation on primary agricultural and processed food product exports among the Organization for Economic Cooperation and Development (OECD) countries. A theoretical gravity equation that accounts for innovation is derived. The empirical exercise uses panel data sets covering 21 OECD countries for the period 1990-2003. The R&D capital stock is employed as a tangible way of measuring innovation. Empirical results show that R&D has enhanced exports in the primary agricultural sector. Meanwhile, the market expansion effect of R&D appears to be more than offset by the market power effect in the food processing sector, resulting in a decrease in exports. Also, evidence was found of a positive vertical channeling effect through which R&D in the primary agricultural sector increases exports of processed food products.

Keywords: agriculture; food; gravity equation; innovation; OECD; R&D; International Relations/Trade; Research and Development/Tech Change/Emerging Technologies (search for similar items in EconPapers)
Date: 2007
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Persistent link: http://EconPapers.repec.org/RePEc:ags:jlaare:7075

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