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The Impact of Deposit Money Bank's Agricultural Credit on Agricultural Productivity in Nigeria: Evidence from an Error Correction Model

Author

Listed:
  • Jonathan E. Ogbuabor

    (Department of Economics, University of Nigeria, Nsukka, Nigeria,)

  • Cynthia A. Nwosu

    (Department of Economics, University of Nigeria, Nsukka, Nigeria.)

Abstract

This paper examined the impact of deposit money bank agricultural credit on agricultural productivity in Nigeria using an error correction model and annual time series data for the period 1981-2014. The results indicate that an equilibrium relationship exists between the variables. In addition, we find that deposit money bank's agricultural credit impacts positively and significantly on agricultural productivity in the long-run, but this impact is quite negligible in the short-run. We also find that agricultural land and labour force impact negatively on agricultural productivity both in the long-run and short-run. However, the impact of climate change variables, namely annual rainfall and average temperature remained negligible throughout. The paper therefore supports policies that will enhance and sustain the availability of bank credits at affordable interest rates for the agricultural sector, ensure easy access to land for agricultural purposes, and mechanize the agricultural system to attract the youth population.

Suggested Citation

  • Jonathan E. Ogbuabor & Cynthia A. Nwosu, 2017. "The Impact of Deposit Money Bank's Agricultural Credit on Agricultural Productivity in Nigeria: Evidence from an Error Correction Model," International Journal of Economics and Financial Issues, Econjournals, vol. 7(2), pages 513-517.
    • Handle: RePEc:eco:journ1:2017-02-67
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    References listed on IDEAS

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    3. Frank Girabi & Agnes Elishadai Godfrey Mwakaje, 2013. "Impact of Microfinance on Smallholder Farm Productivity in Tanzania: The Case of Iramba District," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 3(2), pages 227-242, February.
    4. Nawaz AHMAD, 2011. "Impact of Institutional Credit on Agricultural Output: A Case Study of Pakistan," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(10(563)), pages 99-120, October.
    5. Granger, C W J, 1969. "Investigating Causal Relations by Econometric Models and Cross-Spectral Methods," Econometrica, Econometric Society, vol. 37(3), pages 424-438, July.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Anthony Orji & Jonathan E. Ogbuabor & Onyinye I. Anthony-Orji & Jennifer Nkechi Alisigwe, 2020. "Agricultural Financing and Agricultural Output Growth in Developing Economies: Any Causal Linkage in Nigeria?," International Journal of Finance, Insurance and Risk Management, International Journal of Finance, Insurance and Risk Management, vol. 10(2), pages 34-43.
    2. Tanni Roy & Md. Emran Hossain & Md. Jahid Ebn Jalal & Jiban Krishna Saha & Eshrat Sharmin & Md. Akhtaruzzaman Khan, 2021. "Effects of credit on national and agricultural GDP, and poverty: a developing country perspective," SN Business & Economics, Springer, vol. 1(10), pages 1-20, October.
    3. Kamilu Adio Saka & Kehinde Banjo Aladelusi, 2022. "Commercial Bank Financing And Development Of Crop Production In Nigeria," Malaysian E Commerce Journal (MECJ), Zibeline International Publishing, vol. 6(1), pages 09-13, January.
    4. Anthony Orji & Jonathan Emenike Ogbuabor & Jennifer Nkechi Alisigwe & Onyinye Imelda Anthony-Orji, 2021. "Agricultural Financing, Agricultural Output Growth and Employment Generation in Nigeria," European Journal of Business Science and Technology, Mendel University in Brno, Faculty of Business and Economics, vol. 7(1), pages 74-90.

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    More about this item

    Keywords

    Deposit Money Bank; Agricultural Credit; Agricultural Productivity; Error Correction Model; Nigeria;
    All these keywords.

    JEL classification:

    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
    • Q14 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Finance
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • N57 - Economic History - - Agriculture, Natural Resources, Environment and Extractive Industries - - - Africa; Oceania

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