CAUSALITY BETWEEN PRODUCTIVITY AND EXPORTS IN AGRICULTURE: EVIDENCE FROM ASIA AND LATIN AMERICA

Abstract

This paper examines the causal relationship between agricultural productivity and exports for selected Asian and Latin American countries. Alternative views about the causal relationship between these variables of economic interest exist. Economic theory provides no firm basis to judge whether productivity causes exports or exports cause productivity (export‐led growth). Since this issue is empirical, econometric tests are utilised to investigate the nature of this causality. Test results are mixed although the export‐led growth hypothesis is validated in a few cases.