Agriculture Production and Transport Connectivity: Evidence from Mozambique

Abstract

Despite relative richness of the existing literature, it remains a challenge to consistently estimate the impacts of transport connectivity on agricultural production. The paper constructs pseudo-panel data with transport infrastructure defined at high resolution in two periods of time and examines spatially heterogeneous impacts of improved transport connectivity. The paper takes advantage of the unique circumstances in Mozambique where the Government invested intensively in road infrastructure during a relatively short period of time in the 2010s. Combining the highly disaggregated location-specific fixed effects with the instrumental variable method, the paper controls for the endogeneity to show that the improved road connectivity increased agricultural production significantly. Rural connectivity and domestic market accessibility are found to be of particular importance, but substantial heterogeneity exists across regions. The northern provinces, where transport connectivity is limited, have the potential for agricultural growth, exhibiting increasing returns to scale.

Keywords:

• Agriculture production
• spatial data
• transport infrastructure

JEL classification:

• H54
• H41
• Q12
• C21

Acknowledgements

I am grateful to the World Bank colleagues for their useful comments and suggestions on earlier versions of this paper. I also acknowledge two anonymous referees for their insightful guidance towards publication. I would like to express my special thanks to the Government of Mozambique for sharing their road network data as well as the agricultural sample survey data. The underlying data and codes supporting the results or analyses are available at the author upon reasonable request.

Disclosure statement

No potential conflict of interest was reported by the author(s).