The role of technical progress in agricultural growth: a study of agricultural sector of Iran

Agriculture has a multifunctional role in economic development in developing countries; besides providing food for growing population, it is a major source of economic growth. Furthermore, growth originating from agriculture is known to be twice as effective in poverty reduction as growth originating from other sectors. Technical progress is a major factor in stimulating agricultural growth. This paper aims to investigate the role of technical progress in agricultural growth. For this purpose, an endogenous growth model applied to the agricultural sector of Iran. The results show that growth in physical capital and material inputs have had the main role in growing the agricultural sector of Iran. Technical progress, found to be the second significant source of the growth. The effect of growth in employed labour on the value-added growth was not significant. The path of technical change found to be neutral, with global innovation spill-over and human capital indices affecting it significantly.