Revisiting Trade Liberalization for Agriculture Productivity: Dynamic Evidence from a Global Panel of Countries
DOI:
https://doi.org/10.15408/sjie.v15i1.49654Keywords:
heterogeneous trade effects, transmission channels, structural readiness, cross country analysisAbstract
Research Originality: This study contributes to the literature by providing a comparative analysis of the dynamic relationship between agricultural trade liberalisation and total factor productivity (TFP) growth across income groups. It highlights how differences in structural capacity and innovation systems shape heterogeneous productivity outcomes across countries.
Research Objectives: This study re-examines the dynamic impact of agricultural trade liberalisation on TFP growth across income groups and identifies the mechanisms underlying divergent productivity outcomes.
Research Methods: A panel Autoregressive Distributed Lag (ARDL) model is applied to panel data from 35 major agricultural-producing countries over the period 2007–2024 to capture heterogeneous short-run dynamics and common long-run relationships.
Empirical Results: The results reveal heterogeneous effects. Trade liberalisation significantly increases TFP growth in high-income countries through stronger technology diffusion and absorptive capacity. However, it generates weak or negative effects in middle-income countries due to structural constraints and limited innovation capacity.
Implications: Agricultural trade liberalisation does not automatically enhance productivity; its benefits depend on domestic structural readiness and innovation capacity.
JEL Classification: F13, Q17, O47, C23
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