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Econometric Analysis of Cotton Production in Mali: Evaluation of the Effects of Support Policies Using a VECM Model

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  • Tidiani Diallo
  • Hasan Yilmaz

Abstract

This study analyses the short‐ and long‐run determinants of cotton yields in Mali using a vector error correction model (VECM). Results reveal a stable long‐term equilibrium relationship between cotton yields and key macroeconomic, institutional and climatic variables. Agricultural input subsidies have a strong positive effect, confirming the vital role of public support in sustaining productivity. Agricultural GDP growth also positively influences yields, likely through improved rural infrastructure and services. Rainfall has a moderate but significant effect, though it is subject to climatic variability. Interestingly, the FCFA/USD exchange rate shows a strong positive association with yields, potentially reflecting gains in export competitiveness and public support adjustments. World cotton prices exert mixed effects, while state‐guaranteed prices show limited influence, suggesting that producer responses are shaped more by structural and environmental factors than domestic price signals. Overall, the findings underscore the importance of targeted subsidies, macroeconomic stability and climate resilience for enhancing cotton productivity in Mali. These results highlight the need for integrated policy strategies that reinforce input systems, promote climate resilience and stabilize macroeconomic conditions to sustain cotton sector performance in Mali.

Suggested Citation

  • Tidiani Diallo & Hasan Yilmaz, 2026. "Econometric Analysis of Cotton Production in Mali: Evaluation of the Effects of Support Policies Using a VECM Model," Journal of International Development, John Wiley & Sons, Ltd., vol. 38(1), pages 125-139, January.
    • Handle: RePEc:wly:jintdv:v:38:y:2026:i:1:p:125-139
    DOI: 10.1002/jid.70021
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    References listed on IDEAS

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