Department of Economics Working Papers,
Vienna University of Economics and Business, Department of Economics

Abstract: This paper presents the first cross-country empirical evidence on the determinants of participation in Fairtrade and the impact of the export of Fairtrade certified products on agricultural growth in low and middle income countries. Using the number of certified producer organizations per country in 2006-2010 as a proxy for Fairtrade exports, estimation results indicate a small but significantly positive effect on the growth rate of per capita value added in agriculture that is largest in upper middle income countries. Given the particularly poverty-reducing effect of agricultural growth, we find empirical evidence that Fairtrade certification is indeed able to deliver its core values, but misses to target the very poor.

Keywords: Fairtrade, agriculture, growth, poverty

JEL-codes: D3; O1 January 2014

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