Does the regulation of manure land application work against agglomeration economies? Theory and evidence from the French hog sector
AbstractThe well-known increase in the geographical concentration of hog production suggests the presence of agglomeration economies related to spatial spillovers and inter-dependencies among industries. In this paper, we examine whether the restrictions on land application of manure may weaken productivity gains arising from the agglomeration process. We develop a model of production showing the ambiguous spatial effect of land availability and the restriction on the manure application rate. Indeed, while the regulation of manure application triggers dispersion when manure is applied to land as a crop nutrient, it also prompts farmer to adopt manure treatment that favors agglomeration of hog production. Estimations of a reduced form of the spatial model with a spatial HAC procedure applied to data for French hog production for 1988 and 2000 confirm the ambiguous effect of land limitations induced by the restrictions on manure application. It does not prevent spatial concentration of hog production, and even boosts the role played by spatial spillovers in the agglomeration process.
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Bibliographic InfoPaper provided by INRA UMR SMART in its series Working Papers SMART - LERECO with number 11-02.
Length: 33 pages
Date of creation: 2011
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hog production; land availability; manure application regulation; agglomeration economies; spatial econometrics;
Find related papers by JEL classification:
- Q10 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - General
- Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
- R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
This paper has been announced in the following NEP Reports:
- NEP-AGR-2011-09-22 (Agricultural Economics)
- NEP-ALL-2011-09-22 (All new papers)
- NEP-EFF-2011-09-22 (Efficiency & Productivity)
- NEP-REG-2011-09-22 (Regulation)
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