1. The agricultural export-growth nexus in the EU-27 and the country risk
Maria Sassi
Dipartimento di Ricerche Aziendali
University of Pavia – Italy

2. Importance of the topic
Process of
liberalization and
global integration of
the EU agriculture
Agricultural growth
a key issue:
What are its
determinants?
Two missing aspects
Why the topic is important.
The role of political,
economic and financial
instability
Implication of
agricultural exports
on agricultural growth

3. Data processing chain Agricultural openness index Agricultural
Sample: EU-27 countries
Time period:
Agricultural
openness index
Source: EUROSTAT
Agricultural
export-growth
nexus
Agricultural
exports-country
risk nexus
Agricultural
Productivity
Source: EUROSTAT
Country risk
Factors
Source: PRS Group
Correlation

4. Data processing chain Agricultural openness index Agricultural
Sample: EU-27 countries
Time period:
Agricultural
openness index
Source: EUROSTAT
Agricultural
export-growth
nexus
Agricultural
exports-country
risk nexus
Agricultural
Productivity
Source: EUROSTAT
Country risk
Factors
Source: PRS Group
Correlation

5. Agricultural openness index
Agricultural exports
to agricultural
value added
Elasticity of the
agricultural export
ratio to population
Openness index
adjusted by the
country size

6. Data processing chain Agricultural openness index Agricultural
Sample: EU-27 countries
Time period:
Agricultural
openness index
Source: EUROSTAT
Agricultural
export-growth
nexus
Agricultural
exports-country
risk nexus
Agricultural
Productivity
Source: EUROSTAT
Country risk
Factors
Source: PRS Group
Correlation

7. Agricultural export-growth nexus

8. Agricultural export-growth nexus
EU-24 (without Latvia, Estonia, Malta)

9. Data processing chain Agricultural openness index Agricultural
Sample: EU-27 countries
Time period:
Agricultural
openness index
Source: EUROSTAT
Agricultural
export-growth
nexus
Agricultural
exports-country
risk nexus
Agricultural
Productivity
Source: EUROSTAT
Country risk
Factors
Source: PRS Group
Correlation

10. Openness and country risk
Financial risk
Economic risk
Political risk

11. Data processing chain Agricultural openness index Agricultural
Sample: EU-27 countries
Time period:
Agricultural
openness index
Source: EUROSTAT
Agricultural
export-growth
nexus
Agricultural
exports-country
risk nexus
Agricultural
Productivity
Source: EUROSTAT
Country risk
Factors
Source: PRS Group
Correlation

12. Determinants of the agricultural
labour productivity =
annual average
growth of agricultural
labour productivity

13. Determinants of the agricultural
labour productivity
Government stability, socio-economic conditions,
investment profile, internal and external conflict, corruption,
military in politics, religious tensions, law and order,
ethnic tensions, democratic accountability and bureaucracy quality. = +
Vector of political
risk components:
12 weighted variables
annual
average growth
of agricultural
labour
productivity

14. Determinants of the agricultural
labour productivity
Foreign debt as a percentage of GDP, foreign debt as a
percentage of exports of goods and services, current account
as a percentage of exports of good and services, net international
liquidity as months of import cover and exchange rate stability.
Vector of
political
risk components = + +
Vector of financial
risk components:
5 weighted variables
annual
average growth
of agricultural
labour productivity

15. Determinants of the agricultural
labour productivity
GDP per head, real GDP growth, annual inflation rate,
budget balance as a percentage of GDP and current
account as a percentage of GDP.
Vector of
political
risk components = + + +
Vector of economic
risk components:
5 weighted variables
annual
average growth
of agricultural
labour productivity
Vector of
financial
risk components

16. Determinants of the agricultural
labour productivity
Vector of
political
risk components
Vector of
economic
risk components
Level of agricultural
productivity in 2000 = + + + +
Control variable of
the influence of the
business cycle
annual
average growth
of agricultural
labour productivity
Vector of
financial
risk components

17. Determinants of the agricultural
labour productivity
Vector of
political
risk components
Vector of
economic
risk components = + + + + +
annual
average growth
of agricultural
labour productivity
Vector of
financial
risk components
Control
variable

18. Results
OLS method

19. Results agricultural growth and agricultural growth and
Negative correlation between
agricultural growth and
risk of:
Inflation;
Budget deficit;
Current account deficit;
Deterioration of investment
environment.
Positive correlation between
agricultural growth and
risk of:
Low economic development rate;
Deterioration in socio-economic
conditions.
OLS method

20. Conclusions Agricultural openness index Positive nexus Strong nexus
Economic environment
Positive nexus
Consistency
with literature
Agricultural
productivity
Country risk
factors

21. Conclusions Pathways through which the country risk factors
affect agric. development
Agricultural
openness index
Strong nexus
Economic environment
Positive nexus
Methodology
Consistency
with literature
Agricultural
productivity
Country risk
factors