Public investment in agricultural R&D and extension

Dandan Zhang, Chunlai Chen and Yu Sheng

China Agricultural Economic Review, 2015, vol. 7, issue 1, 86-101

Abstract: Purpose - – The purpose of this paper is to analyze the effects of public investment in agricultural R&D and extension on broadacre farming productivity in Australia. Design/methodology/approach - – An autoregressive integrated moving average (ARIMA) regression model is applied to estimate the effects of public investment in agricultural R&D and extension on Australian braodacre productivity. Findings - – The study reveals that public investment in agricultural R&D and extension has contributed almost two-thirds of average annual broadacre productivity growth between 1952-1953 and 2006-2007, the average internal rate of return to public investment in agricultural R&D and extension was 28.4 and 47.5 per cent a year, respectively, and overseas spill-ins is an important source of domestic agricultural productivity growth. Practical implications - – Policy implications: the findings suggest that increasing public investment in agricultural R&D and extension and maintaining agricultural R&D policy stability are equally important to have a sustained long-term agricultural productivity growth, and maintaining an open trade and investment regime is important to benefit from foreign knowledge spillovers which is especially important for developing countries. Originality/value - – This paper contributes to the existing literature by employing more sophisticated econometric techniques with an extended data set for the period from 1952-1953 to 2006-2007. The study separates the contribution of public R&D investment and the extension investment, and also takes into account the contribution of overseas public investment on the TFP growth in the Australian broadacre sector.

Keywords: Australia; Agriculture; Total factor productivity; Public R&D (search for similar items in EconPapers)
Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:eme:caerpp:v:7:y:2015:i:1:p:86-101

DOI: 10.1108/CAER-05-2014-0052

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