Measuring and Analysing the Effect of International Agricultural Expenditures on R&D in the Total Factor Productivity of Agricultural Sector in Iran

Agricultural economists have indicated that the rate of return of expenditures on agricultural R&D is relatively favourable. Alston and Evenson (2007) say that the R&D expenditure is the core variable for the productivity factor. In this study, at first the impact of international agricultural research and human capital was estimated on productivity by Almon lag model and in the next step the rate of return international agricultural R&D on the agricultural sector of Iran was calculated. The result showed that the international R&D in agricultural sector affects on productivity after 4 years and this effect will last for 3 years. The long term coefficient of international agricultural R&D is 0.18 and the internal rate of return (IRR) was calculated up to 38% in productivity models of Iran during the period of 1979- 2008 (1358-1387) which is lower than the average rate in developing countries.