The impact of trade liberalisation on South African agricultural productivity

M.Y. Teweldemedhin and Herman D. van Schalkwyk

No 95963, 2010 AAAE Third Conference/AEASA 48th Conference, September 19-23, 2010, Cape Town, South Africa from African Association of Agricultural Economists (AAAE)

Abstract: This study attempts to examine the empirical relationship between trade and total factor productivity (TFP) in the agricultural sector using both cross -sectiona, (across nine agricultural commodities), and time -series analysis. The Error Correction Model of ordinary least square (OLS) results from the cross -sectional analysis confirm that export shares and capital formation were found to be positive and significant; whereas, import shares and real exchange rate were found to be related negatively. However, the net effect of export and import shares had a positive effect. This implies that trade liberalisation causes productivity gains. Moreover, the time -series analysis goes in the same direction as the cross -sectional results, showing that there is a robust relationship among TFP, degree of openness, and capital formation. Whereas, debt was found to be inversely related, this implies that agricultural industries / farmers lack debt management skills.

Keywords: International; Relations/Trade (search for similar items in EconPapers)
Pages: 15
Date: 2010-09
New Economics Papers: this item is included in nep-afr, nep-agr, nep-eff and nep-int
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaae10:95963

DOI: 10.22004/ag.econ.95963

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