IMPACT OF INSTITUTIONAL QUALITY AND RESEARCH AND DEVELOPMENT (R&D) ON AGRICULTURAL PRODUCTIVITY IN LOW- AND MIDDLE-INCOME COUNTRIES

Author

Agossou Justin TOVILODE, Southern Illinois University CarbondaleFollow

Date of Award

8-1-2023

Degree Name

Master of Science

Department

Agribusiness Economics

First Advisor

Moon, Wanki

Abstract

Institutions are considered a fundamental determinant of economic growth. And agriculture is the key sector for poverty reduction and sustainable economic growth in low and middle-income countries. The vital role of agriculture would not materialize without sustained agricultural productivity growth driven by public investments in agricultural Research and Development (R&D). The objective of the thesis is threefold: (i) to measure the effect of institutions on agricultural productivity and on public agricultural R&D investments in low and middle incomes countries, (ii) to estimate the impact of public R&D investment on agricultural productivity, and (iii) to test the hypothesis that agricultural R&D spending would differ across countries at different stages of economic development (i.e., examine the role of per capita GDP in determining agricultural R&D spending).Agricultural productivity is measured by yield (cereal yield); institutions are measured by four indicators: protection of property rights, impartial public administration, judicial independence, and legal enforcement of contracts; agricultural R&D is represented by public investments in R&D. Data were collected from the World Bank, the FRASER Institute, and the Agricultural Science and Technology Indicators (ASTI) over the period of 2000 to 2011 and in 49 low-and middle-income countries (25 from sub-Saharan Africa, 11 from LAC, and 13 from Asia). Panel data with fixed effects models were estimated to address the three objectives. The multiple linear regression analysis reveals the protection of property rights and legal enforcement of contracts have a substantial but opposite impact on agricultural productivity (cereal yield) across low-and middle-income countries. The same result suggests that impartial public administration affect positively public agricultural R&D investment while property rights, judicial independence, and legal enforcement of contracts have no significant implications on public agricultural R&D investment. The analysis also indicates that agricultural R&D investment positively impacts cereal yield across low-and middle-income countries. The same analysis carried out in the three regions has shown that the four institution indicators have different effects on agricultural productivity (cereal yield) and public agricultural R&D investment. In addition, the analysis suggests that public agricultural R&D investment significantly impacts agricultural productivity in Asia and the LAC regions but not in sub-Saharan Africa. Furthermore, the result confirms that agricultural R&D spending differs across countries at different stages of economic development.