The extent of the market and stages of agricultural specialization

M. Shahe Emran and Forhad Shilpi

Canadian Journal of Economics, 2012, vol. 45, issue 3, 1125-1153

Abstract: This paper provides empirical evidence of an U-shaped causal relationship between the extent of the market (size of the relevant urban market) and the pattern of crop specialization in a village economy. We use the recent two-stage estimator developed by Lewbel (2012) and exploit heteroscedasticity for identification. The results suggest that the portfolio of crops in a village economy becomes more diversified initially as the extent of the market increases. However, after the market size reaches a threshold, the production structure starts to specialize again. This evidence on the stages of agricultural diversification is consistent with the stages of diversification identified in the recent literature for the economy as a whole and also for the manufacturing sector.

JEL-codes: O12 R11 R12 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (56)

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Related works:
Journal Article: The extent of the market and stages of agricultural specialization (2012)
Working Paper: The Extent of the Market and Stages of Agricultural Specialization (2008)
Working Paper: The extent of the market and stages of agricultural specialization (2008)
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