Abstract
Several theories of regional economic development and structural economic transformation have emphasized the important role of agricultural development in industrialization and vice versa. In the view of Benjamin Franklin, the agricultural and nonagricultural sectors are competitive, whereas in Alexander Hamilton's opinion the two sectors are complementary. Does agricultural growth support or compete with industrial growth? To address this question, we examine the causal relationship between the sectoral output in agriculture and manufacturing in eight post-communist countries. The bootstrap panel Granger causality approach is utilized to detect the direction of causality. The findings show that the growth complementarity hypothesis is confirmed in five out of eight countries under review. Policy implications are discussed.
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