Production technology and technology production: The economics of crop breeding in China

The importance of technology in promoting the expansion of supply and increased productivity has long been recognized in the international community. Past analyses, however, failed to closely investigate the way technology affects total factor productivity (TFP). There is also very little work on the microeconomics of how new agricultural technologies are produced and what factors can aid in their efficient generation.;The overall goal of my dissertation is to assess the impact of investments in research on China's agricultural TFP and to examine the efficiency of China's breeding centers. To achieve the overall goal, I use two data sets and a series of state-of-the-art methodologies. The dissertation consists of three essays.;The first essay creates a framework for analyzing the impact of China's research investment and new technology on TFP. Specifically, I use a new measure of technology to track the changes in the quantity and quality of genetic resources in China's major rice, wheat and maize producing provinces. The results show that from 1980--95 China's TFP rose and new technology accounts for most of the rise. The results can aid leaders from China and the international community in making future R&D investment decisions.;The second essay investigates economies of scale and scope and other potential sources of improvements in the economic efficiency of crop breeding. Using a data set that I collected in 2001 covering 46 wheat and maize breeding institutes from 1981--2000, I estimate cost functions for the production of new varieties of China's wheat and maize breeding institutes. I find strong economies of scale. The findings are robust to the way in which the output of the breeding process is measured, whether the focus of the study is on wheat, maize or both crops and when a variety of different methodologies are used.;The final essay aims to explore practical issues in reorganizing China's breeding centers to take advantage of the unexploited cost savings associated with the expansion of the scale of China's breeding institutes. I use my data to describe the benefits and costs of reforming China's breeding system. I also construct a model to identify the least-cost configuration of breeding institutes and measure the magnitude of the efficiency gains that can be generated by merging smaller institutes into larger centers. The final reorganization plan depends on the tradeoff between the benefits from economies of scale and the costs of merging.