An Empirical Investigation of the Impact of R&D Expenditures and Climate Change on Wheat Productivity: Evidence from China, India, and Pakistan

Abstract

This study examines how research and development (R&D) expenditures, temperature fluctuations, and rainfall variability influenced wheat productivity in China, India, and Pakistan from 1996 to 2018. Drawing on data from FAOSTAT, the Pakistan Economic Survey, and World Development Indicators, we employ Pooled Mean Group (PMG) and Autoregressive Distributed Lag (ARDL) models to explore short- and long-run dynamics. Our findings indicate that R&D investments do not exert a significant short-run effect but play a pivotal role in boosting wheat yields over the long run. Specifically, a 1% increase in R&D expenditure correlates with a 10% rise in wheat productivity across the three countries, although the returns vary—6% in China, 17% in India, and 12% in Pakistan—due in part to differences in innovation adoption and infrastructure. Additionally, a 1% temperature rise is associated with a 4% decrease in long-run yield, while variability in rainfall disrupts sowing schedules and reduces water availability during critical growth stages, further constraining productivity. These findings underscore that while climate factors pose significant risks to wheat yields, sustained investments in agricultural R&D and improved resource management are essential for enhancing food security in South Asia