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Does Agricultural Growth Cause Manufacturing Growth?
Author(s) -
Shifa Abdulaziz B.
Publication year - 2015
Publication title -
economica
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.532
H-Index - 65
eISSN - 1468-0335
pISSN - 0013-0427
DOI - 10.1111/ecca.12142
Subject(s) - endogeneity , industrialisation , agriculture , instrumental variable , manufacturing sector , economics , identification (biology) , agricultural economics , manufacturing , growth theory , natural resource economics , business , macroeconomics , econometrics , geography , market economy , botany , neoclassical economics , archaeology , marketing , biology
The role of agricultural development for industrialization is central to several theories of economic development and policy. However, empirically assessing the impact of agricultural growth on manufacturing growth is challenging because of endogeneity concerns. To address the identification challenge, I use random weather variations to instrument agricultural growth. The instrumental variable estimations show that agricultural growth has a significant positive impact on manufacturing growth. I discuss the empirical implications for efficiency of the manufacturing sector and the role of agriculture in Africa's industrialization.