Research and Productivity in Mexican Agriculture

Partial and total factor productivity (TFP) measures of Mexican agriculture are calculated for 1960–90. The long‐run effects of research and international transfer of technology on TFP are examined over the 1940‐90 period using cointegration procedures. TFP increased at an average annual rate of 2.5%, exceeding the corresponding growth in the United States (2.1%). TFP grew particularly fast in the 1960s and 1970s. A 1% rise in research investment increased TFP by 0.13%, and a 1% increase in U.S. TFP translated into a 1.11% increase in Mexican TFP. The average annual rate of return to research investment is about 64%.