The relation between agricultural and non-agricultural economic development: Technical report on an empirical analysis of European regions

Anne Margarian

No 01/2012, Arbeitsberichte aus der vTI-Agrarökonomie from Johann Heinrich von Thünen Institute, Federal Research Institute for Rural Areas, Forestry and Fisheries

Abstract: Support of agriculture is justified, among others, by its contribution to rural economic development. Nevertheless, the relation between agricultural and general economic development may be ambiguous. On the one side, agriculture may affect other sectors positively via multiplier and income effects. On the other side, competition effects may arise due to the application of common factors, specifically labour, by agriculture and other sectors. Under these circumstances, support of agricultural production may create distorted market signals and thereby affect the medium and long-term economic development negatively. This research analyses the regionally differentiated relation between the agricultural and the non-agricultural development empirically. The panel estimation model applies data of the common regional accounts from NUTS3 regions of the EU27. It identifies different development regimes with different roles for agriculture. In the most developed economies, competition effects dominate. Nevertheless, in low-productivity regions of Eastern Europe, agriculture stabilises the development of employment and value added. Thereby, policy faces the challenge to support simultaneously structural change in agriculture and the development of other sectors in rural regions.

Keywords: Europe; regional development; structural change; sectoral development; role of agriculture; Europa; Regionalentwicklung; Strukturwandel; Sektorale Entwicklung; Rolle der Landwirtschaft (search for similar items in EconPapers)
JEL-codes: O13 O18 Q10 R12 R15 (search for similar items in EconPapers)
Date: 2012
New Economics Papers: this item is included in nep-agr
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.econstor.eu/bitstream/10419/57873/1/690077866.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:zbw:vtiaba:012012

Access Statistics for this paper

More papers in Arbeitsberichte aus der vTI-Agrarökonomie from Johann Heinrich von Thünen Institute, Federal Research Institute for Rural Areas, Forestry and Fisheries Contact information at EDIRC.
Bibliographic data for series maintained by ZBW - Leibniz Information Centre for Economics ().