Enhancing rural income through public agricultural R&D: Spatial spillover and infrastructure thresholds

Abstract

How much farmers benefit from public agricultural research and development (R&D) has been a topic of continued interest. Compared to studies based on classical statistics, we show theoretically and employ the Spatial Durbin Model and the Panel Threshold Regression Model to investigate the different impacts and spatial spillover effects of public agricultural R&D on farm and nonfarm income. Using China's provincial panel data from 2000 to 2015, we find that public agricultural R&D has a positive impact on rural household income. This impact is mainly reflected by nonfarm income and exhibits heterogeneous interprovincial-spatial spillover.We also find that interregional differences in infrastructure, represented by road transportation and Internet access in rural areas, are the main reasons for the spatial heterogeneity. Higher road density and Internet penetration enhance the positive impact of public agricultural R&D on rural income, and the enhancement exhibits characteristics of thresholds, after which the size of enhancement becomes increasingly larger.