Institutional credit and agricultural production nexus
AbstractCredit plays an important role in the development of agriculture sector. It capitalizes farmers to adopt new technologies. It helps smooth consumption by providing Working capital and reduces poverty in the process. Both formal and informal lenders are active in rural credit market of Pakistan. There is a need to highlight the relationship between institutional agricultural credit and agricultural production. Time series data for the period of 1973-2009 was used. The study utilized Johansen and Juselius (JJ) cointegration approach and Granger causality test to explore the long-run equilibrium relationship and the possible direction of causality between availability of institutional agricultural credit, labor force availability, cropping intensity, water availability and agricultural production. Result shows the long run relationship among variables. Granger causality test shows the uni-directional causality among institutional agricultural credit and agricultural production and among water availability and agricultural production. The bi-directional causality was found among availability of labor force & cropping intensity and among water availability & cropping intensity.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 30932.
Date of creation: 2011
Date of revision: 2011
Publication status: Published in International Journal of Business and Social Science 13.2(2011): pp. 279-284
Institutional credit; Agricultural credit; Pakistan;
Find related papers by JEL classification:
- O1 - Economic Development, Technological Change, and Growth - - Economic Development
- G0 - Financial Economics - - General
- Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
- A11 - General Economics and Teaching - - General Economics - - - Role of Economics; Role of Economists
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- Sial, Maqbool Hussain & Awan, Masood Sarwar & Waqas, Muhammad, 2011. "Role of Institutional Credit on Agricultural Production: A Time Series Analysis of Pakistan," MPRA Paper 31815, University Library of Munich, Germany.
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