Spatial Analysis of Research-Productivity Nexus: A Case of Thai Rice Sector

Abstract

Location matters for agricultural production and for farmers’ decision on adopting new crop varieties. Similar outputs, inputs, and productivity tend to be observed in areas with close proximity suggesting the importance of neighbourhood influence. However, this spatial pattern has been ignored when estimating the agricultural research impact on productivity in which agricultural research has been recognised as a primary source of productivity change. This study aims to test the existence of any spatial pattern of research-productivity relation using subnational-level data for the case of Thai rice production. The estimation incorporates the spatial effects in the total factor productivity (TFP) determinant model using the provincial-level data which includes 76 provinces of Thailand during 2004–2012. The simple spatial econometric models, spatial lag and spatial error, are employed. The significance of the spatial dependence is confirmed using the spatial lag model suggesting the TFP in one province is significantly associated with the TFP in neighbouring provinces. The findings generally confirm the existence of neighbourhood influence, and so the spatial pattern should be taken into account when measuring the agricultural research impact on productivity using subnational-level data.