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The Export Supply Response ofMangoes: A Cointegration and Causality Analysis

  • 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.)

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.

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Article provided by Department of Economics, The Lahore School of Economics in its journal Lahore Journal of Economics.

Volume (Year): 18 (2013)
Issue (Month): 1 (Jan-June)
Pages: 93-116

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Handle: RePEc:lje:journl:v:18:y:2013:i:1:p:93-116
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  1. David F. Hendry & Neil R. Ericsson, 1990. "Modeling the demand for narrow money in the United Kingdom and the United States," International Finance Discussion Papers 383, Board of Governors of the Federal Reserve System (U.S.).
  2. Islam, Nurul, 1990. "Horticultural exports of developing countries: past performances, future prospects, and policy issues," Research reports 80, International Food Policy Research Institute (IFPRI).
  3. 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 1057-72, June.
  4. Granger, C. W. J. & Newbold, P., 1974. "Spurious regressions in econometrics," Journal of Econometrics, Elsevier, vol. 2(2), pages 111-120, July.
  5. 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.
  6. 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.
  7. 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.
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