The extent of the market and stages of agricultural specialization

M. Shahe Emran and Forhad Shilpi

Canadian Journal of Economics/Revue canadienne d'économique, 2012, vol. 45, issue 3, 1125-1153

Abstract: 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. Ce texte fournit des résultats empiriques sur la relation causale en U entre la taille du marché (taille du marché urbain pertinent) et le pattern de spécialisation des cultures dans une économie village. On utilise un estimateur en deux étapes développé par Lewbel (2012) et on exploite l’hétéroskédasticité pour l’identification. Les résultats suggèrent que le portefeuille de cultures dans une économie village devient plus diversifié initialement à proportion que la taille du marché s’accroît. Cependant, après que le marché dépasse un certain seuil, la structure de production tend à se spécialiser à nouveau. Ce résultat sur les stages de diversification agricole sont consistants avec les stages de diversification identifiés dans la littérature récente pour l’économie dans son ensemble et aussi pour le secteur manufacturier.

Date: 2012
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Citations: View citations in EconPapers (48)

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https://doi.org/10.1111/j.1540-5982.2012.01729.x

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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Persistent link: https://EconPapers.repec.org/RePEc:wly:canjec:v:45:y:2012:i:3:p:1125-1153

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