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Linkages between Market Participation and Productivity: Results from a Multi-Country Farm Household Sample

  • Rios, Ana R.
  • Masters, William A.
  • Shively, Gerald E.

We build upon international trade literature to analyze the direction of causality between market participation and productivity. Cross-country household data from Tanzania, Vietnam and Guatemala are used in a 2SLS approach with market participation and productivity as endogenous variables. Results indicate that households with higher productivity tend to participate in agricultural markets regardless of market access factors. In contrast, having better market access does not necessarily lead to higher productivity. This finding suggests that investments in market access infrastructure provide minimal, if any, improvements in agricultural productivity; whereas programs targeted at enhancements in farm structure and capital have the potential to increase both productivity and market participation.

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Paper provided by American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association) in its series 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida with number 6145.

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Date of creation: 2008
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Handle: RePEc:ags:aaea08:6145
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