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The Export Supply Response ofMangoes: A Cointegration and Causality Analysis

Author

Listed:
  • Abdul Ghafoor

    () (Assistant Professor, Institute of Business Management Sciences, Faculty of Agricultural Economics and Rural Sociology, University of Agriculture, Faisalabad.)

  • Khalid Mushtaq

    () (Agricultural Economist, Rural Finance Resource Centre, National Institute of Banking and Finance in Islamabad.)

  • Abedullah

    (Institute of Business Management Sciences, Faculty of Agricultural Economics and Rural Sociology, University of Agriculture, Faisalabad.)

Abstract

This paper analyzes the impact of major factors on the export of mangoes from Pakistan. We use a cointegration approach and error correction mechanism applied to data for the period 1970–2005. Mango exports are regressed against the index of relative prices of mango exports (2000 = 100), the quantity of domestic mango production, real agricultural gross domestic product (GDP), the length of all-weather roads, and international standardization, i.e., the impact of the World Trade Organization agreement. The results of the augmented Dickey-Fuller test reveal that all the data series are I(1). Applying Johansen’s test shows that the highest elasticity coefficients are found for mango production in the short and long run, followed by real agricultural GDP. The Granger causality test points to the bi-directional causality of mango exports with the relative price index and all-weather roads, and unidirectional causality with real agricultural GDP and mango production. The study recommends promoting proper orchard management, developing the appropriate infrastructure, and stabilizing export prices to increase mango exports from Pakistan.

Suggested Citation

  • Abdul Ghafoor & Khalid Mushtaq & Abedullah, 2013. "The Export Supply Response ofMangoes: A Cointegration and Causality Analysis," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 18(1), pages 93-116, Jan-June.
  • Handle: RePEc:lje:journl:v:18:y:2013:i:1:p:93-116
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    References listed on IDEAS

    as
    1. Dickey, David A & Fuller, Wayne A, 1981. "Likelihood Ratio Statistics for Autoregressive Time Series with a Unit Root," Econometrica, Econometric Society, vol. 49(4), pages 1057-1072, June.
    2. Johansen, Soren & Juselius, Katarina, 1990. "Maximum Likelihood Estimation and Inference on Cointegration--With Applications to the Demand for Money," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 52(2), pages 169-210, May.
    3. Hendry, David F. & Ericsson, Neil R., 1991. "Modeling the demand for narrow money in the United Kingdom and the United States," European Economic Review, Elsevier, vol. 35(4), pages 833-881, May.
    4. Granger, C. W. J. & Newbold, P., 1974. "Spurious regressions in econometrics," Journal of Econometrics, Elsevier, vol. 2(2), pages 111-120, July.
    5. Islam, Nurul, 1990. "Horticultural exports of developing countries: past performances, future prospects, and policy issues," Research reports 80, International Food Policy Research Institute (IFPRI).
    6. Usman Haleem & Khalid Mushtaq & Azhar Abbas & A. D. Sheikh, 2005. "Estimation of Export Supply Function for Citrus Fruit in Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 44(4), pages 659-672.
    7. Tambi, N. Emmanuel, 1999. "Co-integration and error-correction modelling of agricultural export supply in Cameroon," Agricultural Economics, Blackwell, vol. 20(1), pages 57-67, January.
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    More about this item

    Keywords

    Mango; unit root; cointegration; Granger causality; Pakistan;

    JEL classification:

    • Q11 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Aggregate Supply and Demand Analysis; Prices

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