Agricultural exports and economic growth in less developed countries

ArticleinAgricultural Economics 33(2):145-152 · September 2005with36 Reads
Impact Factor: 1.19 · DOI: 10.1111/j.1574-0862.2005.00358.x · Source: RePEc

    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.