Munich Personal RePEc Archive

Interdependence between research and development, climate variability and agricultural production: evidence from sub-Saharan Africa

Bannor, Frank and Dikgang, Johane and Kutela Gelo, Dambala (2021): Interdependence between research and development, climate variability and agricultural production: evidence from sub-Saharan Africa.

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Abstract

The performance of the agricultural sector in sub-Saharan Africa (SSA) remains low compared to other regions. This is often attributed to the fact that agriculture in SSA is rain-fed, as well as to inadequate investment in research and development (R&D). It is well documented in the literature that climate variability is a possible reason for the low productivity observed in agriculture. It is similarly well documented that R&D investment affects the growth of agricultural productivity. This paper investigates whether public spending on R&D mitigates the negative effects of climate variability (measured by variability in rainfall) on agricultural productivity in SSA. We do so by employing a dynamic production model, and the Generalised Methods of Moments (GMM) technique. Based on cross-country panel data from the period 1995 to 2016, our empirical findings reveal that both climate variability and the interaction of R&D with climate variability are strongly correlated with agricultural productivity. As expected, climate variability reduces agriculture productivity by 0.433% to 0.296%. The interaction of R&D and climate variability enhances agricultural productivity by 0.124% to 0.065%. We also show that R&D is an absorption channel for the inimical effects of climate variability, and that the way in which climate variability impacts agricultural productivity depends on the magnitude of spending on R&D; in order to move from a negative to a positive impact of climate variability on agricultural productivity, public spending on R&D must increase by 3.492% to 4.554%. We conclude that to address the negative effects of climate variability, there is a need for governments to prioritise and increase spending on R&D.

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