Causality between exports, productivity and financial support in EU agriculture

Abstract

The aim of this paper is to investigate the causal relationship between exports and productivity and exports and agricultural support within the European Union. Using the ARDL approach to cointegration and error correction models, we find evidence of exports within the EU being determined by support in Ireland and France, as well as gains in productivity contributing to export growth in Germany and the UK. This finding may help explain why some countries within the EU, such as France have large agricultural trade surpluses, whilst others run large deficits.