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The extent of the market and stages of agricultural specialization

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  • Emran, M. Shahe
  • Shilpi, Forhad

Abstract

This paper provides empirical evidence of nonlinearity in the relationship between crop specialization in a village economy and the extent of the market (size of the urban market) relevant for the village. The results suggest that the portfolio of crops in a village economy becomes more diversified initially as the extent of the market increases. However, after the market size reaches a threshold, the production structure becomes specialized again. This evidence on the stages of agricultural diversification is consistent with the stages of diversification identified in the recent literature for the economy as a whole and also for the manufacturing sector. The evidence highlights the importance of improving farmers'access to markets through investment in transport infrastructure and removal of barriers to trading.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 4534.

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Date of creation: 01 Feb 2008
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Handle: RePEc:wbk:wbrwps:4534

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Keywords: Transport Economics Policy&Planning; Markets and Market Access; Political Economy; Debt Markets; Crops&Crop Management Systems;

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References

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  1. Sebnem Kalemli-Ozcan & Bent E. S�rensen & Oved Yosha, 1999. "Risk Sharing and Industrial Specialization: Regional and International Evidence," Working Papers 99-16, Brown University, Department of Economics.
  2. Arthur Lewbel, 2003. "Using Heteroskedasticity to Identify and Estimate Mismeasured and Endogenous Regressor Models," Boston College Working Papers in Economics 587, Boston College Department of Economics, revised 15 Dec 2010.
  3. Jacoby, Hanan C, 2000. "Access to Markets and the Benefits of Rural Roads," Economic Journal, Royal Economic Society, vol. 110(465), pages 713-37, July.
  4. Douglas Gollin & Stephen Parente & Richard Rogerson, 2002. "The Role of Agriculture in Development," Center for Development Economics 2002-09, Department of Economics, Williams College.
  5. Imbs, Jean & Wacziarg, Romain, 2000. "Stages of Diversification," CEPR Discussion Papers 2642, C.E.P.R. Discussion Papers.
  6. Douglas Gollin & Stephen L. Parente & Richard Rogerson, 2004. "The Food Problem and the Evolution of International Income Levels," Working Papers 899, Economic Growth Center, Yale University.
  7. Kuznets, Simon, 1971. "Modern Economic Growth: Findings and Reflections," Nobel Prize in Economics documents 1971-2, Nobel Prize Committee.
  8. Francisco Alcalá & Antonio Ciccone, 2003. "Trade, extent of the market and economic growth 1960-1996," Economics Working Papers 765, Department of Economics and Business, Universitat Pompeu Fabra, revised Dec 2003.
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Cited by:
  1. Berg, Claudia & Emran, M. Shahe & Shilpi, Forhad, 2013. "Microfinance and moneylenders : long-run effects of MFIs on informal credit market in Bangladesh," Policy Research Working Paper Series 6619, The World Bank.
  2. Brown, Timothy Tyler, 2014. "How effective are public health departments at preventing mortality?," Economics & Human Biology, Elsevier, vol. 13(C), pages 34-45.
  3. Yang, Dan & Liu, Zimin, 2012. "Does farmer economic organization and agricultural specialization improve rural income? Evidence from China," Economic Modelling, Elsevier, vol. 29(3), pages 990-993.

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