Empirical Analysis of Total Factor Productivity of the Agriculture Sector and Economic Growth of Pakistan
Empirical Analysis of Total Factor Productivity of the Agriculture Sector and Economic Growth of Pakistan
Abdul Wadood Khan1, Sabahat Subhan1*, Asif Ali Abro2 and Riaz Shahid3
ABSTRACT
The current research describes the Total Factor Productivity (TFP) of the agriculture sector and economic growth of the Pakistan from 1980-2018. To analyze the long run relationship among the variables, the Autoregressive Distributed Lag model was used. While constructing the production function, most of the common variables in the production function were utilized. In the construction of productivity and input quantity index, the data of input and output were employed respectively. The data of GDP, capital and labour was used in the agriculture sector for obtaining the agriculture TFP of Pakistan. In addition, the time-series data from 1980-2018 was taken from various publications and official resources. For the period study the estimated annual average of agriculture TFP growth was 2.14% and it contributes 58% to overall agriculture output. The findings explained that the TFP of the agriculture sector was remained highest at 2.86% for a few years and the minimum 0.96% in the 70s. In the 80s, followed by 90s the growing rate of agriculture TFP was 2.24 and 2.46%. During these decades, the TFP growth contributed around (33, 53 and 81%) to agriculture productivity. The analysis of TFP of the agriculture sector shows a significant variation in the TFP growth, due to climate change patterns, public interference, and macroeconomics strategies. The study recommends a dire need to increase capital stock, skilled labour, and cultivated land to boost and enhance agriculture growth as these are the key factors for the agricultural TFP and economic growth of country’s.
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June 2022
Vol. 38, Iss. 2, Pages 388-758
