Are Manufacturing and Agriculture Complementary? Insights from Sweden
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Manuchehr Irandoust
Abstract
Structural economic transformation theories have emphasized the role of agricultural development in industrialization and vice versa. The question is whether industrial development and agricultural development were complementary. Using unique data from Sweden (1800–2020), we investigate the causal link between agriculture and industry. In the presence of structural shifts and breaks, the causal direction is established using the Fourier Granger causality technique. Based on the results, Sweden supports the growth complementarity hypothesis. This indicates that sectoral convergence tendencies are encouraged by the larger expansion of industry, which frequently spreads to agriculture and vice versa.
Acknowledgements
The feedback from two anonymous referees is highly valued. The standard disclaimer applies.
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Conflict of Interest: There is no conflict of interest to declare.
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Research funding: This research received no financial support.
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Data availability: All data used in this study is publicly available online. The information on the sources of data is provided in the text and references.
Value added agriculture, value added manufacturing, and trade openness.
Descriptive statistics of value-added agriculture, value added manufacturing, and trade openness, 1800–2020, n = 221.
Variable |
Mean | SD | Skewness | Kurtosis |
|---|---|---|---|---|
| AGRI | 6,836.17 | 10,812.95 | 1.50 | 3.63 |
| MANUF | 91,801.13 | 200,267.40 | 2.27 | 6.89 |
| TOP | 43.95 | 19.15 | 0.79 | 2.95 |
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