The impact of R&D on factor-augmenting technical change- an empirical assessment at the sector level

The understanding of the drivers of technological progress and their impact on food security is still limited. The paper contributes to the lacking empirical evidence on the speed of technical change affecting various sectors and production factors differently, which leads to contradicting projections of food demand in the global ex-ante assessment models. The aim of the paper is to quantify endogenous factor-augmenting technical change driven by R&D investments in a panel of 13 OECD countries over 1987-2006. A CES framework with cost minimization behavior was chosen to derive the system of equations that were estimated by GMM system estimator. Statistically significant effects of domestic and foreign manufacturing R&D were found on labor-augmenting technical change in manufacturing, agriculture, transport and retail sector. The results of this study provide a starting point for incorporating endogenous factor-biased technical change in impact assessment models aimed at policy analysis of food security.

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JEL Codes:
C3; O3; Q16

 Record created 2017-04-01, last modified 2020-10-28

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