No Mangoes in the Tundra: Spatial Heterogeneity in Agricultural Productivity Analysis*

Abstract

Abstract In line with the wider macro productivity literature existing studies of agricultural production largely neglect technology heterogeneity, variable time‐series properties and the potential for heterogeneous but correlated total factor productivity (TFP) across countries. Our empirical approach accommodates these difficulties and seeks to model the nature of the cross‐section dependence in a sample of 128 countries (1961–2002). Our results suggest that agro‐climatic environment drives similarity in TFP evolution across countries with heterogeneous production technology. This provides a possible explanation for the failure of technology transfer from advanced countries of the temperate ‘North’ to arid and/or equatorial developing countries of the ‘South’.