The Long-Run Impact of Financial Development on Agricultural Productivity: The case of Türkiye
Abstract
The objective of this study is to figure out how financial development and agricultural productivity interacts in the long-run in Türkiye by using two distinct measures of agricultural productivity. Well-established and developed financial market enables farmers to reach funds at lower funding costs and in turn enhance agricultural productivity. The analyses are based on annual time series data of Türkiye for the years between 1980 and 2021. Firstly we checked the stationarity status of each variable by using Kwiatkowski-Phillips-Schmidt-Shin stationarity test. Secondly we conducted co-integration analysis by employing ARDL bounds test to see if our variables move together in the long-run. Lastly we estimated short-run and long-run coefficients by utilizing ARDL estimation technique. Positive statistically significant long-run coefficient estimation was obtained for financial development variable. According to the estimation results, if financial development index goes up by 1% then agricultural productivity per worker increases by 1.75% and agricultural productivity per capita augments by 0.87%. We also obtained positive statistically significant long-run coefficient estimations for control variables of fertilizer consumption and number registered tractors. The finding of positive association between financial development and agricultural productivity reveals the importance of developed financial market for enhancement of agricultural productivity in an economy. Therefore policy makers aiming to improve agricultural productivity should prioritize policies supporting the development of financial markets besides the other policies.
Keywords
Agricultural Productivity, Financial Development, Fintech, ARDL, Co-integration
Ethical Statement
I hereby declare that this study is an original one; that I have acted in accordance with the principles and rules of scientific ethics in all stages of the study, including preparation, data collection, analysis and presentation of information; that I have cited all data and information not obtained within the scope of this study and included these sources in the bibliography; that I have not made any changes to the data used; that I have accepted the terms and conditions of the Konya Selçuk University Journal of Social Sciences Institute and have complied with ethical duties and responsibilities.
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