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Citation Information

Type Working Paper
Title Market Structure and Productivity Growth in Ghanaian Cocoa Production
Publication (Day/Month/Year) 2006
URL http://www.csae.ox.ac.uk/conferences/2006-EOI-RPI/papers/csae/Zeitlin.pdf
This paper assesses the impact of partial liberalization in Ghana's cocoa market on output in that sector. It is argued that the extent to which reforms fostered competitive village-level oligopsonies among Licensed Buying Companies has been an important determinant of producer productivity. Theoretical links between oligopsonistic competition and producer productivity are examined. This issue is then studied in the context of a two-year doubling of cocoa output at the national level. Evidence from microeconomic data confirms a significant increase among existing farmers, although this rate of increase is smaller than that observed at the national level. Analysis of production reveals an economically significant and statistically robust relationship between village-level Licensed Buying Company competition and the level and growth rate of total factor productivity. The analysis is then extended to consider evidence for diĀ®erentiating between possible mechanisms and the distributional implications of each.

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