No Mangoes in the Tundra: Spatial Heterogeneity in Agricultural Productivity Analysis

In line with the wider macro productivity literature existing studies of agricultural production largely neglect technology heterogeneity, variable time-series properties and the potential for heterogeneous but correlated total factor productivity (TFP) across countries. Our empirical approach accommodates these difficulties and seeks to model the nature of the cross-section dependence in a sample of 128 countries (1961-2002). Our results suggest that agro-climatic environment drives similarity in TFP evolution across countries with heterogeneous production technology. This provides a possible explanation for the failure of technology transfer from advanced countries of the temperate North' to arid and/or equatorial developing countries of the South'.