Agricultural exports and economic growth in less developed countries

Agricultural Economics (Impact Factor: 1.19). 09/2005; 33(2):145-152. DOI: 10.1111/j.1574-0862.2005.00358.x
Source: RePEc


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.

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    • "The study investigates the relationship between Malawi's exports and its GDP. Although the export-led growth hypothesis has gained wide acceptance (Krueger, 1990; World Bank, 1991, 1993), the contribution of agricultural exports to economic growth in developing countries has been neglected in the literature (Dawson, 2005). In addition, past studies have effectively assumed that a given increase in exports has the same magnitude of impact on GDP as an equivalent decrease in exports. "

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    ABSTRACT: The introduction of agricultural reforms has debatable effects on food security in developing countries. This research investigates how such effects influenced maize supply in two developing countries which were among the first to introduce agricultural reforms. Conclusions from the research suggest that agricultural reforms led to mixed results. This may be attributed to the sometimes stop-go nature of reform implementation. The mixed results are reflected in the weak maize output response to price changes. Overall country economic conditions, state of agricultural development can be attributed to the pace of response, hence effect on agricultural supply. Elasticity of maize output to changes in price and acreage are strongly significant in maize output for the case of Kenya. Both restricted models of maize production suggest that prior to the introduction of reforms acreage, prices and alternative crops were more elastic when simulated with Zambian data than with Kenyan data.
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    ABSTRACT: Developing countries, particularly those that depend heavily on a small number of agricultural exports, are vulnerable to domestic and international shocks. These countries often have difficulty achieving sustained economic growth. This analysis uses Malawi, a country that earns most of its foreign exchange from tobacco, as a case study of export concentration and heavy exposure to volatility. The econometric results suggest that the decline in Malawi’s gross domestic product (GDP) when tobacco exports are falling is almost three times greater than the increase in GDP when exports are rising. Model-based simulations indicate that variability in tobacco exports leads to slower economic growth because GDP falls by a relatively large amount in response to a given decrease in exports, while recovering little during an upswing in exports. Gains in tobacco yield and improvements in marketing efficiency, however, can help buffer Malawi’s GDP from variability in export revenues.
    SSRN Electronic Journal 01/2009; DOI:10.2139/ssrn.1452941
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