Does agricultural growth have a causal effect on manufacturing growth?
Though the role of agricultural growth for manufacturing growth has been at the center of the discourse on economic development, empirically identifying the causal effect of agricultural growth on manufacturing growth has remained illusive for the correlation between the two doesn't necessarily imply causality. This paper attempts to overcome the identification problem. Since agriculture is heavily dependent on the weather, random weather variations are used as instruments to identify the causal impact of agricultural growth on manufacturing growth. Results show that agricultural growth has a significant positive impact on manufacturing growth. The impact is higher the higher is agriculture's share in the economy (as measured by GDP and employment share). For example, in an economy with 50% of agricultural GDP, a 1% increase in agricultural output increases manufacturing output by about 1%.
|Date of creation:||02 Sep 2011|
|Contact details of provider:|| Web page: http://www.eaae.org|
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- John Laitner, 2000. "Structural Change and Economic Growth," Review of Economic Studies, Oxford University Press, vol. 67(3), pages 545-561.
- Bruce L. Gardner, 2000. "Economic Growth and Low Incomes in Agriculture," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(5), pages 1059-1074.
- Richard Tiffin & Xavier Irz, 2006. "Is agriculture the engine of growth?," Agricultural Economics, International Association of Agricultural Economists, vol. 35(1), pages 79-89, 07.
- Majumdar, Sumon & Mani, Anandi & Mukand, Sharun W., 2004.
"Politics, information and the urban bias,"
Journal of Development Economics,
Elsevier, vol. 75(1), pages 137-165, October.
- Sumon Majumdar & Anandi Mani & Sharun W. Mukand, 2004. "Politics, Information and the Urban Bias," Discussion Papers Series, Department of Economics, Tufts University 0409, Department of Economics, Tufts University.
- repec:hoo:wpaper:e-92-3 is not listed on IDEAS
- Valenzuela, Ernesto & Wong, Sara & Sandri, Damiano, 2007. "Distortions to Agricultural Incentives in Ecuador," Agricultural Distortions Working Paper 48394, World Bank.
- Anderson, Kym & Martin, William J., 2007.
"Distortions to Agricultural Incentives in Asia,"
Agricultural Distortions Working Paper
48557, World Bank.
- Ardeni, Pier Giorgio & Freebairn, John, 2002. "The macroeconomics of agriculture," Handbook of Agricultural Economics, in: B. L. Gardner & G. C. Rausser (ed.), Handbook of Agricultural Economics, edition 1, volume 2, chapter 28, pages 1455-1485 Elsevier.
When requesting a correction, please mention this item's handle: RePEc:ags:eaae11:116003. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search)
If references are entirely missing, you can add them using this form.