Productivity of organic and conventional agriculture – a common technology analysis

The raging debate on organic versus conventional agriculture, and with regard to the aspect of productivity in particular, is far from conclusive. In this analysis, we explore the productivity comparison further through the evaluation of a common production technology used in 74 countries around the world, over the period 2005 to 2014. We found conventional agriculture to be more productive than organic agriculture. Whilst productivity of conventional agriculture is exponentially rising, that of organic is declining, although it has a quadratic growth path. For every hectare of conventional agricultural land given up, only 0.54 hectares of organic land area is substituted. Based on an elasticity of substitution of 0.36, the isoquant is relatively vertical; therefore, much more conventional lands need to be substituted with an organic land area. Research into new and improved fertilising and pest control methods is essential as positive developments there would have a significant impact on organic land productivity

Crowds in or crowds out? The effect of foreign direct investment on domestic investment in Chinese cities

This study investigates the empirical relationship between foreign direct investment (FDI) and domestic investment (DI) in China using a comprehensive city-level panel over the period from 2003 to 2011. System-generalized method-of-moment estimation reveals mixed results. At the national level, FDI neither crowds in nor crowds out DI, indicating a neutral FDI–DI nexus. However, when the full sample is segmented by geographical topology, a positive and significant FDI–DI nexus can be found in eastern and, to a lesser extent, central cities. A negative, although insignificant, association is reported among western cities. Further, the empirical nexus is conditional on several local absorptive capacities including human capital, financial development, and institutional quality. These findings suggest that a region-based FDI strategy in general and local governments should strengthen their absorptive capacities to fully internalize FDI spillovers

Food manufacturing foreign divestment and domestic investment in developed countries

Whilst there is some literature on the effect of inward foreign direct investment on domestic investment for the whole economy and the agricultural sector, that of foreign divestment on domestic investment for food manufacturing is rare. This paper contributes to the literature by estimating the crowding effect of foreign divestment on domestic investment in the food manufacturing sector using an unbalanced panel of 29 countries from 1991 to 2019. Foreign divestment crowded out domestic investment for developed countries in the short and long runs. In terms of the absolute reduction in domestic investment, the short-run effect is higher than the long-run effect. Policies to attract inward foreign direct investment and retain it should be pursued

Does the level of development distinguish the impacts of foreign direct investment on the stages of human development?

This paper assessed the impact of foreign direct investment (FDI) on the stages of human development (HD) using panel data from 87 developing, 13 transition and 34 developed countries from 1990 to 2019. Foreign direct investment positively influenced human development in developing countries. However, the effect was neutral for transition and developed countries. Regarding the effect of FDI on the stages of HD, except for low human development in developing countries, all the computed effects were positive. Failure to delineate the effects of FDI on HDI into stages of HD would result in inaccurate results leading to inappropriate policy responses. Generally, FDI can be promoted in countries within the stages of human development. Whilst similar policies may be relevant, the extent of the outcomes would differ

Productivity of organic and conventional agriculture – a common technology analysis

The raging debate on organic versus conventional agriculture, and with regard to the aspect of productivity in particular, is far from conclusive. In this analysis, we explore the productivity comparison further through the evaluation of a common production technology used in 74 countries around the world, over the period 2005 to 2014. We found conventional agriculture to be more productive than organic agriculture. Whilst productivity of conventional agriculture is exponentially rising, that of organic is declining, although it has a quadratic growth path. For every hectare of conventional agricultural land given up, only 0.54 hectares of organic land area is substituted. Based on an elasticity of substitution of 0.36, the isoquant is relatively vertical; therefore, much more conventional lands need to be substituted with an organic land area. Research into new and improved fertilising and pest control methods is essential as positive developments there would have a significant impact on organic land productivity

IS ORGANIC AGRICULTURE MORE SCALE EFFICIENT THAN CONVENTIONAL AGRICULTURE? THE CASE OF COCOA CULTIVATION IN GHANA

Research background: Despite the growing social recognition of the positive role played by organic farming in the conservation of natural resources and the reduction or elimination of the negative externalities of modern agriculture, the economic competitiveness of organic versus conventional agriculture is a contentious issue. Studies on scale efficiency in the agricultural economics literature, in general, did not address the differences in production practices such as organic and conventional production. Purpose of the article: We estimated scale efficiency of organic and conventional production, tested for differences between organic and conventional agriculture scale efficiency, and explored the sources of inefficiencies. Methods: This was accomplished using cross-sectional data on 658 organic and conventional cocoa farmers, for the 2012/13 production season in the Eastern Region of Ghana. The analysis accounted for selection bias and recognised the fractional property of the scale efficiency measure. Findings & Value added: Organic agriculture is less scale efficient than conventional agriculture. Whilst we recommend that both producer groups improve scale efficiency, organic producers require greater work to do to make up for the almost 50% scale inefficiency. We also found farmer-based organisations to significantly influence scale efficiency. This calls for the need to strengthen farmer-based organisations to increase participation, among other reasons. We departed from the existing scale efficiency literature in a three of ways. We accounted for selection-bias using propensity score matching in the organic and conventional samples in analysing scale efficiency, modelled scale inefficiency using fractional regression and empirically selected the appropriate link function using a battery of tests. Finally, we accounted for an important policy variable; farmer-based organisation. We employed propensity score matching that accounted from observable biases. Further research may consider other methods that account for both observed and unobserved variations

Human Development Effects of Food Manufacturing Foreign Direct Investment

Whilst some studies explored the effect of food manufacturing foreign direct investment (FMFDI) on microeconomic and macroeconomic indicators, the human development effect, which is the ultimate for economic management, remains unexplored. This study does that with a focus on developing and developed countries. An unbalanced panel data of 44 (18 developing and 26 developed) countries from 1991 to 2018 with a fixed-effects and general method of moments estimators were employed. Developing countries' FMFDI positively influenced the human development of the total economy. Also, developed countries' FMFDI positively influenced the human development of the total economy. Developing country economic managers should improve the macroeconomic environment to promote foreign direct investment into the food manufacturing subsector. There is a need for a reallocation of FMFDI to developing countries. International bodies such as the United Nations Conference on Trade and Development would be useful in this direction

Trade, Foreign Direct Investment and Agriculture in Developing Countries

Agriculture continues to make significant contributions to developing countries in the presence of globalisation. Thus, international trade and foreign capital flows are important to developing countries. The authors used data on 115 developing countries from 1995 to 2020 to investigate the effect of inward and outward foreign direct investment (FDI) on trade in the agricultural sector of developing countries. Inward FDI enhanced exports, imports, and trade openness. However, outward FDI did not affect exports, imports, and trade openness. To escalate international trade in agricultural products, developing countries must continue to promote the inflow of FDI into agriculture (AIFDI). This requires paying attention to appropriate management of the macroeconomy, keeping down the inflation rate, optimising the currency exchange rate, and keeping interest rates down to boost investment among others. Whilst these would enhance AIFDI that would promote trade, these would directly promote trade. As developing countries have often suffered foreign exchange pressures, they must enhance foreign exchange receipts through increased exports. Increasing human capital can increase exports. Unlike existing studies, the authors used more current data covering many developing countries and accounted for endogeneity

Aid-to-Production, Consumption and Agricultural Growth in Developing Countries

The paper assessed the effect of economic policy on the effects of aid to agricultural production and consumption on agricultural growth in developing countries. We used data from a panel of 117 countries from 1996 to 2020 fitted to a GMM estimator. We found that both aid-to-production and aid-for-consumption discourage agricultural growth. Economic policynindependently enhances agricultural growth. Foreign direct investment promotes agricultural growth. In the presence of economic policy, whilst aid-to-production did not discourage agricultural growth, it worsened the effect of aid-to-consumption on agricultural growth. Among other recommendations, developing countries should seek less foreign aid-toproduction and more FDI into agricultural production as both the former and the latter would increase agricultural growth. Governments in developing countries must enhance trade and macroeconomic policies and promote FDI as this would increase agricultural growth