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Spillovers from agricultural processing

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  • Ryan B. Edwards

Abstract

This paper uses the proliferation of palm oil factories across Indonesia’s undeveloped hinterland to study industrial onset and estimate spillovers from agricultural processing. The main finding is signs of urbanization and structural change around factories: more non-agricultural employment, higher incomes, and more people, firms, and other economic and social organizations. These patterns are largely explained by economic linkages, infrastructure and other public goods, and economies of scale in production. By focusing on subsistence rural regions in a large developing economy, this paper adds a globally- significant new case to a growing literature emphasizing the importance of agglomeration externalities for understanding the birth of new towns, the spatial distribution of economic activity, and structural transformation.

Suggested Citation

  • Ryan B. Edwards, 2024. "Spillovers from agricultural processing," Departmental Working Papers 2024-6, The Australian National University, Arndt-Corden Department of Economics.
    • Handle: RePEc:pas:papers:2024-6
    as

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    File URL: https://acde.crawford.anu.edu.au/sites/default/files/publication/acde_crawford_anu_edu_au/2024-07/acde_tnd_edwards_2024_06-merged-compressed.pdf
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    More about this item

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • F63 - International Economics - - Economic Impacts of Globalization - - - Economic Development
    • J43 - Labor and Demographic Economics - - Particular Labor Markets - - - Agricultural Labor Markets
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
    • Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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