Date of Graduation

Spring 5-18-2019

Document Type

Thesis

Degree Name

Master of Science in International and Development Economics (MSIDEC)

College/School

College of Arts and Sciences

Department/Program

Economics

First Advisor

Yaniv Stopnitzky

Abstract

A significant increase of 50.5 percent in the national production of cocoa was registered between 2011 and 2015 in Colombia. Nevertheless, 5,890 tons were imported in 2015 to supply domestic demand. Unlike other crops, the production of cocoa has made a significant contribution to the income of approximately 38,000 families of which 90 percent are small farm-producers with very little capital. Facilitating credit for investment is one of the main strategies of the national government to increase cocoa productivity. Correspondingly, the impact of the credit for investment on the cocoa agricultural productivity and if those investments have a spillover effect is studied in 584 municipalities in Colombia. I use a yearly municipal agricultural assessment combined with municipality socioeconomic variables and georeferenced data from 2007 to 2017 to measure this impact and spatial interactions, based on a fixed effect and a spatial autoregressive model - SAR. Overall, the results suggest a positive relationship of credit for investment on agricultural productivity. Similarly, I found positive and significant agricultural productivity spillover. My results suggest that access to credit for investment is fundamental in cocoa agricultural productivity but the impact is larger when spatial interactions are accounted for, which provides a rationale for the national government to increase the offer of credit for investment for the development of a regional economic agglomeration.

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