Technology Diffusion, International Spillovers and Human Capital in the Mediterranean Agricultural Sector

This paper investigates the roles of human capital and openness in the process of technology diffusion and productivity growth in the Mediterranean agricultural sector. We estimate a nonlinear productivity growth specification that nests the logistic and the confined exponential technology diffusion functional forms, using a panel of nine South Mediterranean Countries and five European Union Countries for the period 1990 to 2005. Agricultural total factor productivity estimates are obtained from a random coefficients dynamic production function. The results favor the confined exponential specification, suggesting that the steady state is a balanced growth path, with all backward economies growing at the pace determined by the leading edge. The findings illustrate the positive roles of openness and human capital in facilitating technology diffusion and fostering agricultural growth. We find strong complementary effects between foreign technology embodied in imported capital goods and educational attainment on farming performance. The regression results are robust to alternative productivity estimates and different growth regressions.