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Technology catch-up in agriculture among advanced economies

Authors: Ball, Eldon V.; San Juan Mesonada, Carlos; Sunyer Manteiga, Carlos; Sheng, Yu. Working paper. Economics 20-03. Universidad Carlos III de Madrid. Published, 2020-05-13. ISSN: 2340-5031

Thursday 14 May 2020, by Carlos San Juan


The article tests the hypothesis of convergence in relative levels of total factor productivity across seventeen member countries of the Organization for Economic Cooperation and Development and tries to identify factors that affect the speed of convergence. Using a panel data model, we investigate the role of relative factor intensities (i.e. embodiment) and assess the impact of fluctuations in aggregate economic activity (i.e., the business cycle). We also consider the role of human capital spillovers and agricultural policy differences such as the Common Agricultural Policy of the European Union. We use a two-step difference Generalised Method of Moments estimator to quantify the contributions of each of these factors. We find evidence of convergence in productivity levels across the different phases of the business cycle. However, the speed of convergence was higher during contractions (negative output gap) than along expansions. Results show that the speed of convergence among the European countries during the economic slowdown is slower than in Australia, Canada and the United States. Finally, we found significant spillovers from investment in human capital and the productivity of the national economy leading to more rapid productivity growth.

Recommended quotation:

Ball, E. V.; San Juan Mesonada, C., Sunyer Manteiga, C. and Sheng, Y. Technology catch-up in agriculture among advanced economies. Working paper. Economics 20-03. Universidad Carlos III de Madrid. 2020-05-13. ISSN: 2340-5031

Keywords: Total Factor Productivity, business cycle, productivity convergence, OECD Agriculture, Generalised Method of Moments. JEL classifications: Q16, Q17

Acknowledgements: For the financial support of the Instituto de Estudios Fiscales (Spain) project 2018/00389/001 and the University Carlos III of Madrid Project 2009/00426/002. We are grateful to Kennet Ericson for his collaboration in editing the manuscript.

Link to the library full text: Ball, Eldon V.; San Juan Mesonada, Carlos; Sunyer Manteiga, Carlos; Sheng, Yu. Technology catch-up in agriculture among advanced economies. Working paper. Economics 20-03. Universidad Carlos III de Madrid. Published, 2020-05-13. ISSN: 2340-5031

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