Application of the Solow Growth Model to the Food and Beverage Industry in Senegal: Total Factor Productivity and Poverty Reduction

By: Claire Von Loesecke '15

Advising Faculty: Maria Cruz-Saco

Within the past several decades, developing countries have liberalized their economies and adopted export orientation in order to achieve heightened economic growth. At the same time, the share of processed foods exports from developing countries has increased substantially. The expansion of this export-oriented industry is important because of its ability to create employment opportunities, improve the terms of trade, and generate knowledge and technology spillovers; all of which intrinsically support superior growth performance and improved productivity. In this way, food manufacturing represents a dynamic export line for Senegal in that it has the potential to positively impact economic and total factor productivity (TFP) growth. Because these same factors, such as efficiency gains and openness to trade, that increase TFP also help to reduce poverty, this paper will examine how TFP growth of the food processing industry impacts poverty. Accordingly, this paper will also seek to determine the impact of export-led growth in the food processing industry on levels of poverty in Senegal.

This honors thesis may be read in its entirety at Digital Commons @ Connecticut College.

Related Fields: Economics