Conferences at Department of Economics, University of Toronto, RCEF 2012: Cities, Open Economies, and Public Policy

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Private Gains from Public University Research: The Case of Productivity Spillovers from Agricultural Experiment Stations

Shawn Kantor, Alexander Whalley*

Last modified: 2012-06-27


This paper investigates the effects of university research on regional economic development in American agriculture.  We study whether the establishment of agricultural experiment stations at the end of the 19th century led to persistent impacts on local economic development.  The opening of the stations at predetermined locations provides the rare chance to examine whether university research has persistent effects -- many decades later -- on local economic development.  Our analysis of county-level agricultural census data from 1870 to 1930 reveals that university research does indeed increase local productivity, and the effects persist and even grow over time.  We find crop reallocation response to university research, but little evidence for an investment response, suggesting that reallocation is necessary for the full spillovers effect to manifest.  We also find that the national agricultural extension program begun in 1914 was effective in spreading university research and agricultural development far from universities and throughout the nation.   

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