Abstract
Wheat is considered the essential food staple crop in the region, and the area and production increased significantly in the last few decades. For increased population and diversified food demand, it is required to increase the crop yield by not changing other inputs such as land and water. Crop yield is closely linked with R&D investments and environmental factors such as temperature and rainfall. R&D investments can increase the return to scale, provide long-term growth, and achieve food security. This study aims to investigate empirically the impact of R&D investments, temperature, and rainfall on yield in China, India, and Pakistan. Data from 1996 to 2018 was obtained from various data sources such as FAOSTAT, the Economics Survey of Pakistan, and World Development Indicators. Pooled Mean Group (PMG) and ARDL employed short-run and long-run relationships between crop yield and explanatory variables as a whole for the region and individual country. The results show that R&D expenditures are highly significant in the long run and the return to R&D is 10% in the region. For individual countries' analysis, the return is 6%, 17%, and 12%, respectively for China, India, and Pakistan. This relationship between crop yield and R&D is statistically insignificant in the long run. For the region temperature increase negatively affects crop yield as the negative coefficient indicates that a percent increase in temperature will reduce the crop by 4% in the long run. The highly significant coefficient of the area under wheat crop shows that a unit increase in the area increases wheat yield by 0.20 units in the long run and 0.47 units in the short run. The variable rainfall has no relationship with crop yield in the long run but its relationship with wheat yield is negative and significant in the short run. R&D investments are crucial for long-term growth and food security.