Determinants and impacts of public agricultural research: product-level evidence from agricultural Kohsetsushi in Japan

The public sector is an important source of agricultural research as many of the producers are individual farmers who cannot bear the cost of research and development. Public institutes for experimentation, research, and extension called Kohsetsushi help local producers in agriculture and manufacturing improve productivity through various technology transfer channels. Based on the concept of the agricultural innovation system, this study examines whether research effort allocation of agricultural Kohsetsushi in a region smoothly responses to changes in specialization of the region, whether their research efforts are conducive to innovation, and whether determinants and impacts of their research activities vary across products. The results of panel estimation reveal that research effort allocation is responsive to changes in specialization of a region, which suggests the feedback mechanism mediated by extension staff in the region. Agricultural Kohsetsushi act as a significant source of agricultural product innovations, with researchers allocated in different fields exhibiting different levels of elasticity across products.