The influence of agricultural trade liberalization on agricultural total factor productivity growth: Empirical evidence from ASEAN countries

Agriculture is a way of life in the ASEAN region due to the fact that eight out of ASEAN member states rely on agriculture for food and income. Therefore, the present study empirically explores the impact of agricultural trade liberalization on agricultural total factor productivity (ATFP) growth in ASEAN countries using panel data from 2002–2021. By deploying the data envelopment analysis-Malmquist productivity index (DEA-Malmquist) approach in the first stage and the pooled mean group (PMG) panel autoregressive distributed lag (ARDL) model in the second stage, the findings reveal that ATFP in the ASEAN countries demonstrated moderate growth over the study period, with an average mean value of 1.028. This signifies that the average growth in ATFP in the region was 2.8% across the countries and over a period of time. This suggests that the ASEAN countries have become increasingly dependent on technological innovation in their agricultural sectors in recent years. Agricultural trade liberalization positively contributed to ATFP growth in the short term, whereas the impact was not statistically significant in the long term. These consequences are highly significant and should not be disregarded since trade liberalization plays a crucial role in determining agricultural competitiveness.