Agricultural exports and economic growth in less developed countries

Abstract

This article examines the contribution of agricultural exports to economic growth in less developed countries (LDCs). A sources-of-growth equation is developed from a dual economy model where agricultural and nonagricultural sectors are both divided into export and nonexport subsectors. This is then estimated using panel data for 62 LDCs for 1974-1995. Results provide evidence that there are significant structural differences in economic growth between low, lower-middle, and upper-income LDCs. Investment in the agricultural export subsector has a statistically identical impact on economic growth as investment in the nonagricultural export subsector. The marginal productivities in nonexport subsectors are over 30% lower than those in respective export subsectors. From a policy perspective, the results suggest that export-promotion policies should be balanced. Copyright 2005 International Association of Agricultural Economics.

Agricultural exports and economic growth: Empirical evidence from the major rice exporting countries

“…In fact, Johnston and Mellor (1961) claim that the expansion of agricultural exports plays a key role in increasing incomes in developing countries, as the resource allocation of those countries may give them a comparative advantage in the agricultural sector. Compared to the previous studies, the relationship between agricultural exports (for that matter, sectoral exports) and economic growth has been neglected and only a very small study identifies the effect of agricultural exports on GDP (Dawson 2005;SanjuanLopez and Dawson 2010;Duc and Tram 2011).…”

“…Furthermore, its role in economic development is regarded as an important policy issue in many less developed countries (LDCs) (Dawson 2005). Numerous studies have investigated the relationship between exports and economic growth by examining the effects of the total exports on the gross domestic product (GDP) (Feder 1982;Marin 1992;Ghartey 1993;Kwan and Kwok 1995;Shan and Sun 1998).…”

“…Following the work of Dawson (2005), this study focuses on the supply perspective in its investigation of the role of agricultural exports (in particular rice exports) in economic growth as supply has a comparative advantage in rice production. Initially, this study utilizes a theoretical framework developed by Solow (1957), Feder (1982, and Ram (1985) to develop the following model:…”

“…In order to examine the contribution of agricultural sectors to economic growth, this study elects to divide the export input into three more strictly defined inputs; non-agricultural exports, agricultural exports (excluding rice exports), and rice exports. Therefore, the extended form of the model which captures the effect of sectoral exports on economic growth (Dawson 2005;Duc and Tram 2011;Serenis et al 2011) is as follows: (2) where X N is non-agricultural exports, X A is agricultural exports (excluding rice exports), and X R is rice exports. To derive the growth rate in Equation 2, we can take the total derivative and then divide by Y:…”

Agricultural exports and the growth of agriculture in India

“…A solution is to define income as the GDP of agriculture net of exports. The majority of empirical studies, however, including Levin and Raut (1997), Dawson (2005) and Sanjuán-López and Dawson (2010), use GDP as a measure of income rather than the GDP net of exports, as the former better reflects economic development. Thus, the estimated coefficients here represent the sum of spill-over effects from agricultural exports and the importance of these exports in the GDP of agriculture.…”