The impact of trade liberalisation on South African agricultural productivity
AbstractThis study attempts to examine the empirical relationship between trade and total factor productivity (TFP) in the agricultural sector using both cross -sectiona, (across nine agricultural commodities), and time -series analysis. The Error Correction Model of ordinary least square (OLS) results from the cross -sectional analysis confirm that export shares and capital formation were found to be positive and significant; whereas, import shares and real exchange rate were found to be related negatively. However, the net effect of export and import shares had a positive effect. This implies that trade liberalisation causes productivity gains. Moreover, the time -series analysis goes in the same direction as the cross -sectional results, showing that there is a robust relationship among TFP, degree of openness, and capital formation. Whereas, debt was found to be inversely related, this implies that agricultural industries / farmers lack debt management skills.
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Bibliographic InfoPaper provided by African Association of Agricultural Economists (AAAE) & Agricultural Economics Association of South Africa (AEASA) in its series 2010 AAAE Third Conference/AEASA 48th Conference, September 19-23, 2010, Cape Town, South Africa with number 95963.
Date of creation: Sep 2010
Date of revision:
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TFP; OLS; Trade liberalization or degree of openness; capital formation; International Relations/Trade;
This paper has been announced in the following NEP Reports:
- NEP-AGR-2011-08-15 (Agricultural Economics)
- NEP-ALL-2011-08-15 (All new papers)
- NEP-EFF-2011-08-15 (Efficiency & Productivity)
- NEP-INT-2011-08-15 (International Trade)
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