Evidence of growth complementarity between agriculture and industry in developing countries

摘要: Abstract Using dynamic panel models with data for 62 developing countries, this paper examines whether growth in agriculture elicits manufacturing. For identification, I use population-weighted, average temperature as an instrument agriculture, exploring exogenous variation land yields. find large short-run effects: a one-percentage point increase is estimated to raise manufacturing by 0.47–0.56 percentage (baseline), and 0.28–0.47 (conservative). Extensions of the empirical model suggest that benefits sector improving its domestic terms trade, increasing share investment saving GDP, capacity import industrial inputs. Together, these findings lend support notion plays key macroeconomic roles industrialization countries relieving saving, aggregate demand, fiscal, foreign exchange constraints on sector.