The effect of agricultural investments by governments on economic growth and financial markets: An application on developed and developing countries

In this study, Bound Test Analysis (ARDL) was applied for the 2001-2016 period in order to examine the effects of the Agricultural Orientation Indices (AOI) representing the agricultural investments of countries on the Stock Exchange Index (SE) and Gross Domestic Product (GDP) of developed and developing countries. The independent variables of the two ARDL models created are AOI and the dependent variables are SE and GDP. To estimate the relations between the variables, yearly panel date series belonging to the period of 2001 - 2016 are taken into account. According to the results of the analysis of border tests, Agriculture Orientation Index (AOI) and the Stock Exchange Index (SE) and Gross Domestic Products (GDP) variables are cointegrated in both developed and developing countries. AOI variable has no statistically significant effect on SE variable, GDP variable is negatively affected by the AOI variable in the long term both developed countries and developing countries. In developed countries, the AOI variable has a negative relationship with the SE variable. In addition, it was determined that the AOI variable has a negative effect on the GDP variable in the short term. AOI variable does not affect on both SE and GDP variables in the short term.