Induced innovation and spillover effects of US and Canadian research expenditures in Canadian agriculture

Abstract

This study examines the induced innovation hypothesis (IIH) from 1958 to 2015 for two Canadian agriculture regions: Central Canada (the provinces of Ontario and Quebec) and Western Canada (the provinces of Alberta, Saskatchewan and Manitoba). There is broadly consistent support for the IIH for Canadian agriculture, especially for Western Canadian agriculture. In addition, there is support for the notion that US, as well as Canadian, research expenditures are important to explain changes in the input ratio in Canadian agriculture in the long run. This indicates the existence of spillover effects from US agricultural research expenditures to Canadian agriculture.