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The impact of trade liberalisation on South African agricultural productivity


  • Teweldemedhin, M.Y.
  • van Schalkwyk, Herman D.


This 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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  • Teweldemedhin, M.Y. & van Schalkwyk, Herman D., 2010. "The impact of trade liberalisation on South African agricultural productivity," 2010 AAAE Third Conference/AEASA 48th Conference, September 19-23, 2010, Cape Town, South Africa 95963, African Association of Agricultural Economists (AAAE);Agricultural Economics Association of South Africa (AEASA).
  • Handle: RePEc:ags:aaae10:95963

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    References listed on IDEAS

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    8. Athanasios Vamvakidis, 1999. "Regional Trade Agreements or Broad Liberalization: Which Path Leads to Faster Growth?," IMF Staff Papers, Palgrave Macmillan, vol. 46(1), pages 1-3.
    9. Ramirez, Miguel D., 1998. "Does public investment enhance labor productivity growth in Chile? A cointegration analysis," The North American Journal of Economics and Finance, Elsevier, vol. 9(1), pages 45-65.
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    More about this item


    TFP; OLS; Trade liberalization or degree of openness; capital formation; International Relations/Trade;

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