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Productivity convergence in the European regional agricultures. Determinants of its evolution

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  • Cuerva Narro, Maria Carmen
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    The aim of this study is to analyse the evolution of the European regional agricultural productivity in terms of convergence. The initial hypothesis is that, in spite of the integration process, the agricultural productivity does not converge to the same stationary level. Additionally, we try to identify the decisive factors affecting such productivity growth. Productivity related information comes from Cambridge Econometrics database for a set of 125 EU-15 regions in the period 1985-2004. The methodology used consists in traditional beta convergence regressions. The difficulties with cross-sectional estimations require the use of panel data techniques for a better estimation of the speed of convergence. The main results show that convergence occurs to different stationary states and the productivity growth is related to the loss of agricultural employment and to the levels of investment. Moreover, subsidies of the Common Agricultural Policy (CAP) do not have so far an important role in the productivity growth. It seems that the solution to improve agricultural efficiency is not to increase the market support. CAP instruments should be redefined to stimulate sector investment.

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    Paper provided by European Association of Agricultural Economists in its series 113th Seminar, September 3-6, 2009, Chania, Crete, Greece with number 58002.

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    Date of creation: 2009
    Handle: RePEc:ags:eaa113:58002
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