Agricultural Exports and Economic Growth in Developing Countries: A Panel Cointegration Approach

Abstract

This paper quantifies the contribution of agricultural exports to economic growth in developing countries. We estimate the relationship between GDP and agricultural and non-agricultural exports for 42 countries using panel cointegration methods. Results show that a long-run relationship exists, the agricultural export elasticity of GDP is 0.07 whereas that of non-agricultural exports is 0.13, and total exports Granger-cause GDP, which supports the export-led growth hypothesis. Structural differences exist in the relationship by broad income group. Balanced export-promotion polices are implied for the poorest countries, but, for those with higher incomes, higher economic growth is achieved from non-agricultural exports. Copyright (c) 2010 The Authors. Journal compilation (c) 2010 The Agricultural Economics Society.

Agricultural exports and the growth of agriculture in India

“…The column shows that the long-run elasticity of the GDP of agriculture to farm exports is 0.76 and it is statistically significant at 1% level, a one per cent increase in agricultural exports increases the GDP of agriculture by 0.76 %. This result indicating that the Indian GDP of agriculture is highly elastic to its farm exports seems in line with the finding of Sanjuán-López and Dawson (2010), which supports the agricultural export-led growth hypothesis. But without evidence of the causality, nothing can be said whether the models attributed to the export-driven agricultural growth hypothesis or agricultural growth-led farm exports hypothesis is valid.…”

“…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.…”

“…As noted by Sanjuán-López and Dawson (2010), it is surprising that the empirical relationship between agricultural exports and economic growth has been somewhat neglected in the literature despite its role in the development process being long recognised. In fact, expanding agricultural exports is one of the most promising means of increasing the farmers' incomes.…”

Agricultural Exports and Economic Growth in Burkina Faso

“…As a result of this work, Sanjuan-Lopez and Dawson (2010) examined the contribution of agricultural exports to economic growth in developing countries. They used panel data that spans 42 developing countries to perform the analysis.…”

Analyzing the Linkage between Agricultural Exports and Agriculture’s Share of Gross Domestic Products in South Africa

“…While the true measure of these nations' development needs to be expressed through improvements in the standard of living of the people, their economic growth plays a significant part in this process by providing increased per capita income, increased revenue for government sponsored social services and leading to export led-growth. Relatively recent studies [Tiffin and Irz (2006); Memon et al, (2008); Shombe (2008);Sanjuan-Lopez and Dawson (2010);Raza et al, (2012);Faridi (2012)], have their main emphasis on causality between export growth and economic growth. This has been adopted in a number of recent studies designed to assess whether or not individual countries exhibit evidence for export-led growth hypothesis using time series data.…”