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Sectoral Growth Linkages and the Role of Infrastructure Development: Revisiting the sources of nonfarm development in the rural Philippines

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  • Fuwa, Nobuhiko
  • Balisacan, Arsenio M.
  • Mapa, Dennis
  • Abad Santos, Carlos
  • Piza, Sharon Faye

Abstract

This paper analyzes the sources of rural non-farm sector growth in the Philippines, which has become the main driver of rural poverty reduction. We find that agricultural growth has significantly positive effects on service sector growth (with elasticity of about 0.20) but little effects on manufacturing growth, suggesting that rural labor force is sufficiently mobile or capital is relatively immobile across provinces. We also identify different roles played by national road networks, on the one hand, and local roads, on the other. We find that local road facilitates rural service sector development while national road facilitates agricultural growth.

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Bibliographic Info

Paper provided by International Association of Agricultural Economists in its series 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil with number 126456.

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Date of creation: 28 Jun 2012
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Handle: RePEc:ags:iaae12:126456

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Keywords: sectoral linkages; nonfarm growth; agricultural development; road infrastructure; Philippines; Community/Rural/Urban Development; International Development;

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  1. Deichmann, Uwe & Shilpi, Forhad & Vakis, Renos, 2008. "Spatial specialization and farm-nonfarm linkages," Policy Research Working Paper Series 4611, The World Bank.
  2. Nobuhiko Fuwa, 2007. "Pathways out of rural poverty: a case study in socio-economic mobility in the rural Philippines," Cambridge Journal of Economics, Oxford University Press, vol. 31(1), pages 123-144, January.
  3. Arellano, Manuel & Bover, Olympia, 1995. "Another look at the instrumental variable estimation of error-components models," Journal of Econometrics, Elsevier, vol. 68(1), pages 29-51, July.
  4. Blundell, R. & Bond, S., 1995. "Initial Conditions and Moment Restrictions in Dynamic Panel Data Models," Economics Papers 104, Economics Group, Nuffield College, University of Oxford.
  5. Peter Timmer & Selvin Akkus, 2008. "The Structural Transformation as a Pathway out of Poverty: Analytics, Empirics and Politics," Working Papers 150, Center for Global Development.
  6. Eswaran, Mukesh & Kotwal, Ashok, 1993. "A theory of real wage growth in LDCs," Journal of Development Economics, Elsevier, vol. 42(2), pages 243-269, December.
  7. Foster, Andrew D. & Rosenzweig, Mark R., 2008. "Economic Development and the Decline of Agricultural Employment," Handbook of Development Economics, Elsevier.
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