Are agricultural R&D returns declining and development dependent?

Xudong Rao (), Terrance Hurley and Philip Pardey

World Development, 2019, vol. 122, issue C, 27-37

Abstract: There is widespread professional consensus that agricultural research and development (R&D) realizes high economic returns, though there are concerns as to whether the returns have been declining over the past few decades and are unevenly distributed among different regions in the world. This study examines both the time trend (i.e., increasing or decreasing) and regional developmental differences in the reported returns to agricultural R&D. Using a newly updated and expanded global database of estimated returns to agricultural R&D and a robust statistical methodology, we find that after accounting for methodological changes and other study attributes that have varied over time, the contemporary returns to agricultural R&D investments are as high as ever. We also conduct a Oaxaca decomposition to assess the relative importance of differences among countries in study attributes (e.g., what research was evaluated, by whom, and how) versus differences in how these attributes relate to the IRR (e.g., model parameter estimates). We find that the regional differences in study attributes tend to result in higher IRR estimates in developed countries, whereas developing versus developed country differences in the marginal effects of the attributes on the estimated IRRs tend to result in higher estimates in developing countries.

Keywords: Internal rate of return; Benefit-cost ratio; Research and development (search for similar items in EconPapers)
JEL-codes: O22 Q16 Q18 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

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Working Paper: Are Agricultural R&D Returns Declining and Development Dependent? (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:wdevel:v:122:y:2019:i:c:p:27-37

DOI: 10.1016/j.worlddev.2019.05.009

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