Finance and Hunger : Empirical Evidence of the Agricultural Productivity Channel

Using cross-country and panel regressions, the authors show that financial sector development significantly reduces undernourishment (hunger), largely through gaining farmers and others access to productivity-enhancing equipment, translating into beneficial income and general effects. They show spec...

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Bibliographic Details
Main Authors:	Claessens, Stijn, Feijen, Erik
Format:	Policy Research Working Paper
Language:	English en_US
Published:	World Bank, Washington, DC 2012
Subjects:	AGGREGATE LEVEL AGGREGATE MEASURE AGRICULTURAL EMPLOYMENT AGRICULTURAL OUTPUT AGRICULTURAL PRODUCTIVITY AGRICULTURAL PRODUCTIVITY GROWTH AGRICULTURAL PRODUCTS AGRICULTURAL SECTOR AGRICULTURAL WORKERS AGRICULTURAL YIELDS AGRICULTURE ARABLE LAND AVERAGE LEVEL AVERAGE PRODUCTIVITY BENCHMARK BUSINESS CYCLE CALORIES PER PERSON CALORIES PER PERSON PER DAY CENTRAL BANK CONSUMPTION LEVELS CONSUMPTION SMOOTHING COUNTRY CHARACTERISTICS COUNTRY LEVEL CROP PRODUCTION CROP YIELDS CROSS-COUNTRY DIFFERENCES DEPENDENT VARIABLE DESCRIPTIVE STATISTICS DEVELOPED COUNTRIES DEVELOPING COUNTRIES DEVELOPMENT GOALS DEVELOPMENT INDICATORS DROUGHT ECONOMETRIC MODEL ECONOMIC ACTIVITIES ECONOMIC DEVELOPMENT ECONOMIC GROWTH EMPIRICAL EVIDENCE EMPIRICAL LITERATURE EMPIRICAL RESULTS EMPIRICAL WORK ESTIMATION TECHNIQUES EXPORTS EXTREME POVERTY FARMERS FINANCIAL DEVELOPMENT FINANCIAL INTERMEDIARIES FINANCIAL SECTOR FINANCIAL SECTORS FINANCIAL SYSTEMS FIXED EFFECTS FOOD CONSUMPTION FOOD INTAKE FOOD OUTPUT FOOD PRICES FOOD PRODUCTION GDP GDP DEFLATOR GDP PER CAPITA GINI COEFFICIENT GOVERNMENT EXPENDITURES GROWTH INCREASE GROWTH RATE GROWTH RATES HIGH INEQUALITY HOUSEHOLD INCOME IMPACT ON POVERTY INCOME INCOME DISTRIBUTION INCOME GROWTH INCOME LEVEL INCOME POVERTY INCOMES INCREASES GROWTH INDEPENDENT VARIABLE INDICATORS OF POVERTY INEQUALITY INEQUALITY COEFFICIENT INEQUALITY REDUCTION INSURANCE LIVESTOCK PRODUCTION MALNUTRITION MEAT MICRO-FINANCE NEGATIVE EFFECT NEGATIVE IMPACT NEGATIVE SIGN PANEL REGRESSIONS PER CAPITA GROWTH PER CAPITA INCOME POLICY RESEARCH POOR POOR COUNTRIES POOR HOUSEHOLDS POOR PEOPLE POVERTY GAP POVERTY LINE POVERTY REDUCTION POWER PARITY PRIVATE SECTOR PRODUCTIVE ASSETS PRODUCTIVITY PRODUCTIVITY GROWTH PROPERTY RIGHTS PUBLIC SECTOR PURCHASING POWER REDUCED INEQUALITY REDUCING POVERTY REDUCTION IN POVERTY REGRESSION RESULTS RELATIVE PRICES RICH COUNTRIES RURAL RURAL AREAS RURAL POPULATION SAVINGS SHEEP SIGNIFICANCE LEVEL SIGNIFICANT EFFECT SIGNIFICANT REDUCTION STANDARD DEVIATION STATE-OWNED ENTERPRISES TRADE OPENNESS VALUE ADDED WORLD INEQUALITY
Online Access:	http://documents.worldbank.org/curated/en/2006/12/7245909/finance-hunger-empirical-evidence-agricultural-productivity-channel http://hdl.handle.net/10986/8832

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Summary:	Using cross-country and panel regressions, the authors show that financial sector development significantly reduces undernourishment (hunger), largely through gaining farmers and others access to productivity-enhancing equipment, translating into beneficial income and general effects. They show specifically that a deeper financial sector leads to higher agricultural productivity, including higher cereal yields, through increased fertilizer and tractor use. Higher productivity in turn leads to lower undernourishment. The results are robust to various specifications and econometric tests and imply that a 1 percentage point increase in private credit to GDP reduces undernourishment by 0.22-2.45 percentage points, or about one-quarter the impact of GDP per capita.

Finance and Hunger : Empirical Evidence of the Agricultural Productivity Channel

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