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Does Chinese FDI, Climate Change, and CO 2 Emissions Stimulate Agricultural Productivity? An Empirical Evidence from Pakistan

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  • Shakeel Ahmad

    (College of Economics and Management, Nanjing Agricultural University, Nanjing 210095, China
    China Center for Food Security Studies, Nanjing Agricultural University, Nanjing 210095, China)

  • Muhammad Tariq

    (School of Economics and Management, Southeast University, No.2 Dongnandaxue Road, Nanjing 211189, China)

  • Touseef Hussain

    (College of Public Administration, Nanjing Agricultural University, Nanjing 210095, China)

  • Qasir Abbas

    (College of Economics and Management, Nanjing Agricultural University, Nanjing 210095, China
    China Center for Food Security Studies, Nanjing Agricultural University, Nanjing 210095, China
    Institute of Agricultural & Resource Economics, University of Agriculture, Faisalabad 38000, Pakistan)

  • Hamidullah Elham

    (College of Economics and Management, Nanjing Agricultural University, Nanjing 210095, China
    China Center for Food Security Studies, Nanjing Agricultural University, Nanjing 210095, China)

  • Iqbal Haider

    (Business School of Economics and Management, University of Sargodha, Sargodha 40100, Pakistan)

  • Xiangmei Li

    (College of Economics and Management, Nanjing Agricultural University, Nanjing 210095, China
    China Center for Food Security Studies, Nanjing Agricultural University, Nanjing 210095, China)

Abstract

Pakistan’s agricultural sector growth is dwindling from the last several years due to insufficient foreign direct investment (FDI) and a drastic climate change-induced raise in temperature, which are severely affecting agricultural production. The FDI has paramount importance for the economy of developing countries as well as the improvement of agricultural production. Based on the time series data from 1984 to 2017, this paper aims to highlight the present situation of the agriculture sector of Pakistan and empirically analyze the short-run and long-run impact of Chinese foreign direct investment (CFDI), climate change, and CO 2 emissions on agricultural productivity and causality among the variables. The Autoregressive Distributed Lag Model (ARDL) model and Granger Causality test were employed to find out the long-run, short-run, and causal relationships among the variables of interest. Furthermore, we have employed the Error Correction Model (ECM) to know the convergence of the equilibrium path. The bound test results verified the existence of a long-run association, and the empirical findings confirmed that Chinese FDI has a significant and positive impact, while climate change and CO 2 emissions has negative impact on the agricultural growth of Pakistan both in the short-run and long-run. Granger Causality test results revealed that variables of interest exhibit bi-directional and uni-directional causality. The sector-wise flow of FDI reveals that the agriculture sector of Pakistan has comparatively received a less amount of FDI than other sectors of the economy. Based on the findings, it was suggested to the Government of Pakistan and policymakers to induce more FDI in the agriculture sector. Such policies would be helpful for the progress of the agriculture sector as well as for the economic growth of Pakistan.

Suggested Citation

  • Shakeel Ahmad & Muhammad Tariq & Touseef Hussain & Qasir Abbas & Hamidullah Elham & Iqbal Haider & Xiangmei Li, 2020. "Does Chinese FDI, Climate Change, and CO 2 Emissions Stimulate Agricultural Productivity? An Empirical Evidence from Pakistan," Sustainability, MDPI, vol. 12(18), pages 1-20, September.
    • Handle: RePEc:gam:jsusta:v:12:y:2020:i:18:p:7485-:d:412289
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    2. Chandio, Abbas Ali & Jiang, Yuansheng & Ahmad, Fayyaz & Adhikari, Salina & Ain, Qurat Ul, 2021. "Assessing the impacts of climatic and technological factors on rice production: Empirical evidence from Nepal," Technology in Society, Elsevier, vol. 66(C).
    3. Abbas Ali Chandio & Waqar Akram & Uzma Bashir & Fayyaz Ahmad & Sultan Adeel & Yuansheng Jiang, 2023. "Sustainable maize production and climatic change in Nepal: robust role of climatic and non-climatic factors in the long-run and short-run," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 25(2), pages 1614-1644, February.
    4. Xincai Gao & Lin Ji & Abbas Ali Chandio & Amber Gul & Martinson Ankrah Twumasi & Fayyaz Ahmad, 2022. "Towards Sustainable Agriculture in China: Assessing the Robust Role of Green Public Investment," Sustainability, MDPI, vol. 14(6), pages 1-18, March.
    5. Abbas Ali, Chandio & Yuansheg, Jiang & Asad, Amin & Waqar, Akram & Ilhan, Ozturk & Avik, Sinha & Fayyaz, Ahmad, 2021. "Modeling the impact of climatic and non-climatic factors on cereal production: evidence from Indian agricultural sector," MPRA Paper 110065, University Library of Munich, Germany, revised 2021.
    6. Stephen K. Dimnwobi & Kingsley I. Okere & Favour C. Onuoha & Chukwunonso Ekesiobi, 2022. "Energy Poverty, Environmental Degradation and Agricultural Productivity in Sub-Saharan Africa," Working Papers of the African Governance and Development Institute. 22/096, African Governance and Development Institute..

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