Drivers of growth in agricultural returns to scale: The hiring in of tractor services in the Terai of Nepal

Returns to scale in agriculture have profound implications on how effectively governments’ various efforts in developing countries lead to agricultural intensification and transformation. Historically, agricultural transformation has often accompanied increasing returns to scale. Little direct evide...

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Autor principal: Takeshima, Hiroyuki
Formato: Artículo preliminar
Lenguaje:Inglés
Publicado: International Food Policy Research Institute 2015
Materias:
Acceso en línea:https://hdl.handle.net/10568/151363
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author Takeshima, Hiroyuki
author_browse Takeshima, Hiroyuki
author_facet Takeshima, Hiroyuki
author_sort Takeshima, Hiroyuki
collection Repository of Agricultural Research Outputs (CGSpace)
description Returns to scale in agriculture have profound implications on how effectively governments’ various efforts in developing countries lead to agricultural intensification and transformation. Historically, agricultural transformation has often accompanied increasing returns to scale. Little direct evidence exists, however, on what actually causes such an increase, despite knowledge about many factors that are associated with the increase. We fill the knowledge gap by testing whether the hiring in of tractor services has increased returns to scale in agriculture at the household level in the Terai of Nepal, an area that has undergone a rapid increase in tractor use through custom hiring services. Using the Roy–Rubin framework of identifying causal mechanisms, combined with endogenous switching regression methods and IPW-GMM, we address two sources of endogeneity involved with the estimation of returns to scale: (a) farmers’ self-selection on whether to hire in tractor services; and (b) use of inputs in the production function. Based on the assumptions of the Cobb–Douglas production function specification and perfect efficiency of farm households, we find that the hiring in of tractor services significantly increased the returns to scale in agricultural production for a certain segment of tractor-hiring farm households not owning tractors, for which suitable control groups are found. Findings are robust under various alternative specifications.
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spelling CGSpace1513632025-11-06T07:24:01Z Drivers of growth in agricultural returns to scale: The hiring in of tractor services in the Terai of Nepal Takeshima, Hiroyuki tractors economic growth agricultural growth probability analysis agricultural development returns mechanization Returns to scale in agriculture have profound implications on how effectively governments’ various efforts in developing countries lead to agricultural intensification and transformation. Historically, agricultural transformation has often accompanied increasing returns to scale. Little direct evidence exists, however, on what actually causes such an increase, despite knowledge about many factors that are associated with the increase. We fill the knowledge gap by testing whether the hiring in of tractor services has increased returns to scale in agriculture at the household level in the Terai of Nepal, an area that has undergone a rapid increase in tractor use through custom hiring services. Using the Roy–Rubin framework of identifying causal mechanisms, combined with endogenous switching regression methods and IPW-GMM, we address two sources of endogeneity involved with the estimation of returns to scale: (a) farmers’ self-selection on whether to hire in tractor services; and (b) use of inputs in the production function. Based on the assumptions of the Cobb–Douglas production function specification and perfect efficiency of farm households, we find that the hiring in of tractor services significantly increased the returns to scale in agricultural production for a certain segment of tractor-hiring farm households not owning tractors, for which suitable control groups are found. Findings are robust under various alternative specifications. 2015-11-02 2024-08-01T02:56:52Z 2024-08-01T02:56:52Z Working Paper https://hdl.handle.net/10568/151363 en https://hdl.handle.net/10568/150488 https://hdl.handle.net/10568/153392 Open Access application/pdf International Food Policy Research Institute Takeshima, Hiroyuki. 2015. Drivers of growth in agricultural returns to scale: The hiring in of tractor services in the Terai of Nepal. IFPRI Discussion Paper 1476. Washington, DC: International Food Policy Research Institute. https://hdl.handle.net/10568/151363
spellingShingle tractors
economic growth
agricultural growth
probability analysis
agricultural development
returns
mechanization
Takeshima, Hiroyuki
Drivers of growth in agricultural returns to scale: The hiring in of tractor services in the Terai of Nepal
title Drivers of growth in agricultural returns to scale: The hiring in of tractor services in the Terai of Nepal
title_full Drivers of growth in agricultural returns to scale: The hiring in of tractor services in the Terai of Nepal
title_fullStr Drivers of growth in agricultural returns to scale: The hiring in of tractor services in the Terai of Nepal
title_full_unstemmed Drivers of growth in agricultural returns to scale: The hiring in of tractor services in the Terai of Nepal
title_short Drivers of growth in agricultural returns to scale: The hiring in of tractor services in the Terai of Nepal
title_sort drivers of growth in agricultural returns to scale the hiring in of tractor services in the terai of nepal
topic tractors
economic growth
agricultural growth
probability analysis
agricultural development
returns
mechanization
url https://hdl.handle.net/10568/151363
work_keys_str_mv AT takeshimahiroyuki driversofgrowthinagriculturalreturnstoscalethehiringinoftractorservicesintheteraiofnepal