Estimation and Analysis of the Agricultural Investment Model in Iraq (1990-2020) using the Autoregressive Distributed Lag Methodology | ||
| Kirkuk University Journal For Agricultural Sciences | ||
| Volume 14, Issue 3, September 2023, Pages 375-389 PDF (1.23 M) | ||
| Document Type: Research Paper | ||
| DOI: 10.58928/ku23.14337 | ||
| Authors | ||
| Liyth I. Kh. Abdulah* ; Bassim F. Latif* | ||
| Department of Economic and Agricultural Extension, College of Agriculture, Tikrit University, Tikrit, IRAQ. | ||
| Abstract | ||
| In this research, the effects of some financial and economic determinants of agricultural investment in Iraq during the period (1990-2020) were analyzed using the autoregressive distributed lag (ARDL) methodology. In this context, agricultural loans, inflation rate, budget deficit, exchange rate, and financial allocations to support agricultural projects were chosen as determinants of agricultural investment. The problem of the research is that the Iraqi agricultural sector possesses many components and capabilities that encourage investment, but it suffers from low investments directed to it. This is not commensurate with the importance of this sector, which negatively affects the rates of agricultural development and the decline in the agricultural sector’s ability to increase the rates of self-sufficiency in agricultural products. The research aimed to know the economic determinants and the extent of their impact on investment in the Iraqi agricultural sector. An inferential analytical approach was used based on estimating the autoregressive distributed lag model and demonstrating its suitability to the research data by testing statistical hypotheses related to the model. The data were analyzed and econometric models were estimated using econometrics and time series analysis software Eivews-12. The results of estimating the long-run relationship showed that all determinants have significant effects on agricultural investment except the inflation rate, the most influential of these determinants is the exchange rate, which negatively affects agricultural investment as the dollar exchange rate increases by one dinar, this leads to a decline in agricultural investment by (1.444854) million dinars. Then agricultural loans with a positive impact where an increase in the agricultural loans by one million dinars is offset by an increase in agricultural investment by (53,057) dinars. Followed by financial allocations for agricultural projects with a positive impact, where every increase in investment allocations by one million dinars will lead to an increase in agricultural investment by (422) dinars. And finally, the public budget deficit with a negative impact on agricultural investment, where every increase in the budget deficit by one million dinars will be offset by a decline in agricultural investment by (50) dinars. The joint integration test showed a long-run equilibrium relationship between economic and financial determinants and agricultural investment. The research recommends the need for the state to implement a package of policies and procedures to activate the role of variables affecting agricultural investment, which contribute to attracting local and foreign investments, most notably maintaining a stable exchange rate for the local currency and increasing the volume of agricultural loans provided. | ||
| Keywords | ||
| autoregressive distributed lag models; co-integration; agricultural investment; agricultural loans; inflation; exchange rate | ||
| References | ||
|
[1] Muhammad, O.H., 2017. Agricultural Loans and Agricultural Investment in Iraq, Journal of Administrative and Economic Sciences, 24(106), 324-337.
[2] Ahmed, A.F & Hamza, I.M., 2017. Determinants of Private Investment in the Agricultural Sector in Iraq for the period 1990-2014, Iraqi Journal of Agricultural Sciences, 48(2), 624-635.
[3] Al-Hayali, Y.H., 2019. Sustainable Agricultural Development in Iraq, its concept, importance and obstacles for the period 1990-2017, Academic Journal of Nawroz University, 8(4), 44-56.
[4] Al-Obaidi, S.A & Al-Polani, I.K., 2017. Effectiveness of the Agricultural Initiative in Iraq in 2008 in Stimulating Investment according to some Economic Indicators - an econometric analysis, Journal of Administration & Economics, 111, 1-14.
[5] Mahmoud, Y., 2008. Agricultural Investment, The Arabic Encyclopedia, Volume 2, Damascus.
[6] Al-Tamimi, S.H.H., 2015. Analysis of investment environment indicators and their role in stimulating economic growth in selected countries, with special reference to Iraq, Ph.D thesis in Economic Sciences, College of Administration and Economics, University of Karbala.
[7] Ibrahim, H.I., 2014. The Role of Agricultural Policy in Solving the Problems of the Agricultural Sector in Iraq for the Period 1990-2008, Baghdad University College of Economic Sciences Journal, 41.
[8] Zidan, A.A., 2005. An economic study to show the impact of agricultural investment on the growth of the agricultural sector in Iraq for the duration (1980-2000), MS.c thesis in Agricultural Sciences, College of Agriculture and Forestry, University of Mosul, IRAQ.
[9] Manshdawi, W.A.Z., 2016. The reality of agricultural investment in Iraq in the light of the development of the structure of domestic demand on agricultural crops, Ph.D thesis Economic Sciences, College of Administration and Economics.
[10] Al-Shammari, S.M.Z., 2010. Agricultural Investment in Iraq and the Elements of its Success, Dhi Qar University Scientific Journal, 5(6).
[11] Ahmed, D.M., 2015. Investment is a reading of the concept, patterns and determinants, Dar Majd for Publishing and Distribution, Amman.
[12] Al-Mawla, Y.M.Q., 2011. The Reality of Investment Policy and its Impact on Agricultural Growth in Iraq for the Period 1980-2003, Al-Furat Journal of Agricultural Sciences, 3(1).
[13] Al-Sheikhly, A.A., 2008. Opinions on the problems and agricultural development in Iraq, research paper.
[14] League of Arab States, 2001. Unified Arab Economic Report, Dar Al-Fajr, Abu Dhabi.
[15] Pesaran, H.M., 1997. The role of economic theory in modelling the long-run. Economic Journal, 107, 178-191.
[16] Pesaran, H.M. and Shin, Y., 1999. Autoregressive distributed lag modelling approach to cointegration analysis. In: S. Storm, ed. Econometrics and Economic Theory in the 20th Century: The Ragnar Frisch Centennial Symposium. Cambridge University Press. Ch.11.
[17] Pesaran, M.H.; Shin, Y. and Smith, R.J., 2001. Bounds testing approaches to the analysis of level relationships. Journal of Applied Econometrics, 16, 289-326.
[18] Engle, R.F. and Granger, C.W.J., 1987. Co-integration and Error Correction: Representation, Estimation, and Testing. Econometrica, 55, 251-276.
[19] Johansen, S. and Juselius, K., 1990. Maximum likelihood estimation and inference on cointegration with applications to the demand for money. Oxford Bulletin of Economics and Statistics, 52, 169-210.
[20] Cañal-Fernández , V. and Fernández, J.T., 2018. The long run impact of foreign direct investment, exports, imports and GDP: evidence for Spain from an ARDL approach. European Historical Economics Society, 128, 1-23.
[21] Ministry of Planning, Central Statistical Organization (COS), Statistical Group for the years (1990-2020).
[22] Jarque, C.M., and Bera, A.K., 1980. Efficient Test for Normality, Homoscedasticity and Serial Independence of Regression Residuals. Economics Letters, 6, 256-259.
[23] Breusch, T.S., 1978. Testing for Autocorrelation in Dynamic Linear Models. Australian Economic papers, 17(31), 335-355.
[24] Engle, R.F., 1982. Autoregressive Conditional Heteroscedasticity with Estimates of the Variance of United Kingdom Inflation. Econometrica, 50(4), 987-1007.
[25] Ramsey, J.B., 1969. Tests for Specification Errors in Classical Linear Least-Squares Regression Analysis. Journal of the Royal Statistical Society, 31(2), 350-369.
[26] Klein, L.R., 1962. An Introduction to Econometrics. Englewood Cliffs,N.J.: Prentice-Hall. | ||
|
Statistics Article View: 841 PDF Download: 50 |
||