Accelerating Factors of Public Investment in Agriculture Sector of Pakistan

Gulzar Ali

Abstract


This study is an endeavor to investigate the accelerating factors for public investment in Agriculture Sector of Pakistan that might help in retaining the growth of agriculture sector. The time series data for the period of 1981-2014 was selected. In analytical techniques the Augmented Dicky-Fuller unit root test for the stationarity of data, Johansen Co-integration for co-integrating factor and Vector Error Correction Model (VECM) were applied for the regression analysis. The results obtained from the regression analysis of the study shows that   Value-Added in Agriculture Sector (Vagri), Credit Available to Agriculture Sector (CAagri), Capital Stock in Agriculture Sector (Kstock ), Population Growth Rate (Popg ), Dummy variable for the political stability and favorable condition (Dps) and Lagged Investment in Public Agriculture Sector (Iga(-1)) has significant and positive effect, whereas  Index of Price of Capital (Ipk ) is significant negative impact on the Public Investment in Agriculture Sector of Pakistan.  The study recommends that some incremental efforts required for the government to invest in agriculture sector through national policies and food security accompanying long term planning to enhance the growth of agriculture sector in Pakistan.


Keywords


Public Investment, Agriculture Sector, Investment Accelerator Model, Augmented Dicky-Fuller, Johansen Co-integration and Vector Error Correction Model.

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