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The Dynamics of Job Creation and Job Destruction: Is Sub-Saharan Africa Different?

  • Shiferaw, Admasu
  • Bedi, Arjun S.

Agricultural production is an important source of income and employment for developing countries, yet it is the cause of serious environmental problems. Though ECO-labels appear as a promising alternative to control the negative effects of agriculture on the environment and to increase the income of rural poor, the proportion of agricultural land and exports certified as is quite small. We investigate the factors that affect the adoption of certified organic coffee in Colombia and in particular study the effect of economic incentives on adoption. We find that those who have lower cost of adoption are more likely to be certified as organic. Correcting for sample selection, we find that certified organic production is 40% less productive and 31% less costly than non-certified production. Given the price premium in 2007, certified organic production is 15% less profitable than non-organic production. We find that in order to make organic production attractive, the price premium of certified organic coffee should be about 5 times higher than in 2007.

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Paper provided by Verein für Socialpolitik, Research Committee Development Economics in its series Proceedings of the German Development Economics Conference, Hannover 2010 with number 59.

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Date of creation: 2010
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Handle: RePEc:zbw:gdec10:59
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  1. Arne Bigsten & Paul Collier & Stefan Dercon & Bernard Gauthier & Jan Willem Gunning & Anders Isaksson & Abena Oduro & Remco Oostendorp & Cathy Pattillo & Måns Söderbom & M. Sylvain & Francis Teal & Al, 1997. "Investment in Africa's manufacturing sector: A four country panel data analysis," CSAE Working Paper Series 1997-11, Centre for the Study of African Economies, University of Oxford.
  2. Jeffrey R. Campbell & Jonas D.M. Fisher, 1998. "Aggregate employment fluctuations with microeconomic asymmetries," Working Paper Series, Macroeconomic Issues WP-96-17, Federal Reserve Bank of Chicago.
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  7. Shiferaw, Admasu, 2009. "Survival of Private Sector Manufacturing Establishments in Africa: The Role of Productivity and Ownership," World Development, Elsevier, vol. 37(3), pages 572-584, March.
  8. Faggio, Giulia & Konings, Jozef, 2003. "Job creation, job destruction and employment growth in transition countries in the 90s," Economic Systems, Elsevier, vol. 27(2), pages 129-154, June.
  9. John Baldwin & Timothy Dunne & John Haltiwanger, 1998. "A Comparison Of Job Creation And Job Destruction In Canada And The United States," The Review of Economics and Statistics, MIT Press, vol. 80(3), pages 347-356, August.
  10. Evans, David S., 1986. "The Relationship Between Firm Growth, Size, and Age: Estimates for 100 Manufacturing Industries," Working Papers 86-33, C.V. Starr Center for Applied Economics, New York University.
  11. Soderbom, Mans & Teal, Francis & Harding, Alan, 2006. "The Determinants of Survival among African Manufacturing Firms," Economic Development and Cultural Change, University of Chicago Press, vol. 54(3), pages 533-55, April.
  12. Bigsten Arne & Collier Paul & Dercon Stefan & Fafchamps Marcel & Gauthier Bernard & Gunning Jan Willem & Oostendorp Remco & Pattillo Catherine & Söderbom Måns & Teal Francis, 2005. "Adjustment Costs and Irreversibility as Determinants of Investment: Evidence from African Manufacturing," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 4(1), pages 1-29, October.
  13. Jovanovic, Boyan, 1982. "Selection and the Evolution of Industry," Econometrica, Econometric Society, vol. 50(3), pages 649-70, May.
  14. John Haltiwanger & Stefano Scarpetta & Helena Schweiger, 2008. "Assessing Job Flows Across Countries: The Role of Industry, Firm Size and Regulations," NBER Working Papers 13920, National Bureau of Economic Research, Inc.
  15. Steven J. Davis & John Haltiwanger, 1990. "Gross Job Creation and Destruction: Microeconomic Evidence and Macroeconomic Implications," NBER Chapters, in: NBER Macroeconomics Annual 1990, Volume 5, pages 123-186 National Bureau of Economic Research, Inc.
  16. Shiferaw, A., 2005. "Firm heterogeneity and market selection in Sub-Saharan Africa : does it spur industrial progress?," ISS Working Papers - General Series 19171, International Institute of Social Studies of Erasmus University Rotterdam (ISS), The Hague.
  17. Frazer, Garth, 2005. "Which Firms Die? A Look at Manufacturing Firm Exit in Ghana," Economic Development and Cultural Change, University of Chicago Press, vol. 53(3), pages 585-617, April.
  18. S.A. Lippman & R.P. Rumelt, 1982. "Uncertain Imitability: An Analysis of Interfirm Differences in Efficiency under Competition," Bell Journal of Economics, The RAND Corporation, vol. 13(2), pages 418-438, Autumn.
  19. Van Biesebroeck, Johannes, 2005. "Firm Size Matters: Growth and Productivity Growth in African Manufacturing," Economic Development and Cultural Change, University of Chicago Press, vol. 53(3), pages 545-83, April.
  20. Arne Bigsten & Mulu Gebreeyesus, 2007. "The Small, the Young, and the Productive: Determinants of Manufacturing Firm Growth in Ethiopia," Economic Development and Cultural Change, University of Chicago Press, vol. 55, pages 813-840.
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