Abstract
This study attempts to examine the empirical relationship between trade and total factor productivity (TFP) in the agricultural sector using both cross-sectional (across nine agricultural commodities) and time-series analysis. The ordinary least square (OLS) results from the cross-sectional analysis confirm that export shares and capital formation were found to be positive and significant, whereas import shares and real exchange rate were found to be related negatively. However, the net effect of export and import shares had a positive effect. This implies that trade liberalisation causes productivity gains. Moreover, the time-series analysis goes in the same direction as the cross-sectional results, showing that there is a robust relationship among TFP, degree of openness, and capital formation. Whereas debt was found to be inversely related, this implies that agricultural industries/farmers lack debt management skills.
Recommended Citation
Rena, Ravinder; Teweldemedhin, M. Y.; and Van Schalkwyk, H. D.
(2009)
"The Impact of Trade Liberalisation on Agricultural Productivity in South Africa: An Empirical Study,"
Journal of African Policy Studies: Vol. 15:
No.
2, Article 4.
Available at:
https://ecommons.udayton.edu/joaps/vol15/iss2/4