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Abstract
This paper examines the impact that publicly funded agricultural research has on
productivity in crop production within Thailand. It tests empirically the two hypotheses
that, first, publicly funded research and development (R&D) in crop production
is a significant determinant of total factor productivity (TFP) in the crop sector and,
second, that its social rate of return is high. The statistical analysis applies error
correction methods to national level time series data for Thailand, covering the period
1970–2006. Emphasis is given to public research in crop production, where most
publicly funded agricultural R&D has occurred. The role of international research
spillovers and other possible determinants of TFP are also taken into account. The
results demonstrate that public investment in research has a positive and significant
impact on TFP. International research spillovers have also contributed to TFP. The
results support the finding of earlier studies that returns on public research investment
have been high. This result holds even after controlling for possible sources of upward
biases present in most such studies, due to the omission of alternative determinants of
measured TFP. The findings raise a concern over declining public expenditure on crop
research, in Thailand and many other developing countries.