Do agricultural commodity prices asymmetrically affect the performance of value-added agriculture? Evidence from Pakistan using a NARDL model

Umair Kashif, Junguo Shi (), Snovia Naseem, Muhammad Ayaz, Rehan Sohail Butt, Waris Ali Khan and Mamdouh Abdulaziz Sa Al-Faryan
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Umair Kashif: Jiangsu University
Junguo Shi: Jiangsu University
Snovia Naseem: Jiangsu University
Muhammad Ayaz: Jiangsu University
Rehan Sohail Butt: Jiangsu University
Waris Ali Khan: Universiti Malaysia Sabah

Palgrave Communications, 2023, vol. 10, issue 1, 1-9

Abstract: Abstract In the last few decades, rising prices of agricultural commodities have been an area of concern for most countries owing to high population growth, increased unemployment, and per capita food needs. The current study intends to examine the positive and negative shocks of agricultural product prices, credit disbursement, and the labor force’s impact on the agricultural growth of Pakistan. The nonlinear autoregressive distributed lag (NARDL) method was applied using secondary data sources from 1970 to 2018. The results revealed that positive and negative price shocks contribute positively to agriculture growth; however, positive price shock has a more stimulating effect than negative prices. Furthermore, credit disbursement and labor force significantly positively impact agricultural value added in the short and long run. Finally, the study’s findings have far-reaching consequences for policymakers dealing with Pakistan’s asymmetric relationship between agricultural credit disbursement, commodity prices, and agricultural growth.

Date: 2023
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DOI: 10.1057/s41599-023-01888-4

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