THE EFFECT OF FINANCIAL ACCESS ON AGRICULTURAL CONVERGENCE ACROSS US STATES

We investigate the impact of financial access on production convergence in the US agricultural sector. Our results reveal a half-life of about three years in per capita agricultural production across the US states. We also find that financial access enhances the speed of convergence. Our results are robust to various specifications and in the presence of other factors determinant of dynamics in the agricultural sector, such as the level of unemployment and competition. This paper unveils higher opportunity costs of lower financial access in terms of policy dissemination and technological spillovers across the states