Cross-country agricultural TFP convergence and capital deepening: evidence for induced innovation from 17 OECD countries Articles uri icon

publication date

  • September 2022

start page

  • 185

end page

  • 202

issue

  • 58

volume

  • 58

International Standard Serial Number (ISSN)

  • 0895-562X

Electronic International Standard Serial Number (EISSN)

  • 1573-0441

abstract

  • Using a newly constructed panel dataset for agriculture in 17 OECD countries over the 1973–2011 period, we investigate the
    role of capital deepening in affecting agricultural TFP growth and the convergence of relative TFP levels across countries
    with different relative factor endowments. Our results show that capital deepening contributes positively to agricultural
    productivity growth among countries with similar levels of land relative to labor as reflected in relative prices. Depending on
    the relative endowments of land to labor, countries with relatively more abundant land are more likely to achieve
    technological gains through capital deepening than countries with relatively more labor. This finding is consistent with
    Hayami and Ruttan (1970a) and provides supportive evidence for the induced innovation hypothesis.

subjects

  • Economics

keywords

  • agricultural tfp; cross-country productivity convergence; capital deepening; induced innovation hypothesis