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SUMMARY We examine the effect of five regional integration schemes on the volume of intra‐member trade by means of a gravity model of trade. Parameters for the model are estimated from observations on bilateral trade flows among 46 developed and developing countries from 1954 to 1977. We find that two developed country schemes, the EEC and EFTA and one developing country schema, the Central American Common Market increased intra‐member trade by a factor of four. The Andean Pact and the Latin American Free Trade Area had no effect on intra‐member trade. The ability of integration schemes to increase intra‐member trade is shown to vary directly with the per capita incomes of the integrating countries and inversely with the distance between them.

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The inefficiency of cooperative agriculture relative to private farms is often attributed to difficulties in monitoring or poor incentives. We develop a model to show that, in technologies with numerous sequential steps, even small shortfalls in worker effort can result in large output declines. Using data on cooperative and private farms in El Salvador, we find greater shortfalls in efficiency between cooperatives and private farms, as well as among cooperatives, for coffee, a crop requiring numerous steps in its cultivation, than for maize and sugar, which require fewer steps. Thus the undersupply of effort in cooperatives may be less than differences in productivity suggest, and cooperative agriculture is most likely to be successful where production does not involve many sequential steps.

The value-added diversification strategy provides an option for guaranteeing the sustainability of small farms. This study examines how factors related to managerial strategy and socio-environmental sustainability influence the efficiency of diversification initiatives. For this purpose, we use a novel and unique database of value-added ventures implemented by 49 dairy farms located in northern Spain. We construct a production frontier using a Data Envelopment Analysis (DEA) model to estimate technical efficiency. The mean technical efficiency of the initiatives was 0.56 and 0.59 for the constant and variable returns specifications, respectively. Determinants of efficiency are analyzed with a two-step procedure with a double bootstrap. We find that the elaborations of more complex products other than fresh milk are negatively associated with efficiency. However, specialization in one product with different variants and direct sales both have a positive association with efficiency. In terms of socio-environmental variables, there is a positive association between efficiency and the use of quality schemes such as ‘protected designation of origin’ (PDO), the use of organic labelling and the farmer having university education, and a negative association with the percentage of family labor. Our findings support the idea that value-added diversification contributes to more resilient pathways of development and underlines the importance of good quality management of marketing and operational factors.