Agricultural Exports and Economic Growth in Developing Countries: A Panel Cointegration Approach

This paper quantifies the contribution of agricultural exports to economic growth in developing countries. We estimate the relationship between GDP and agricultural and non-agricultural exports for 42 countries using panel cointegration methods. Results show that a long-run relationship exists, the agricultural export elasticity of GDP is 0.07 whereas that of non-agricultural exports is 0.13, and total exports Granger-cause GDP, which supports the export-led growth hypothesis. Structural differences exist in the relationship by broad income group. Balanced export-promotion polices are implied for the poorest countries, but, for those with higher incomes, higher economic growth is achieved from non-agricultural exports.