Role of Knowledge Components in Value Added Growth of Agriculture Sector in Iran

In respect to the increasing population growth and the increase in food demands as well as the constraints of production factors, according to the endogenous growth models, the best way towards increasing the yields per ha in the agriculture sector is to pay attention to R&D activities, attract the R&D spillovers from the commercial partners, and increase the education and extension expenditures. So, this study examines the impacts of the accumulation of domestic and international R&D expenditures, accumulation of extension and education, and traditional production factors on the value added growth of the agriculture sector in Iran during 1968-2007. Study results indicate low impact of the domestic R&D accumulation and also insignificant impact of the foreign R&D accumulation on the value added growth of the agriculture sector. Moreover, the coefficient impact of the variable “accumulation of agricultural extension and education expenditures” on the value added growth of the sector is not significant as well, while that of the traditional production variables (ie. accumulation of physical and labor capital) is significant.