The impact of R&D investment on grain crops production in China: Analysing the role of agricultural credit and CO2 emissions

Abbas Ali Chandio, Yuansheng Jiang, Waqar Akram, Ilhan Ozturk, Abdul Rauf, Aamir Ali Mirani and Huaquan Zhang

International Journal of Finance & Economics, 2023, vol. 28, issue 4, 4120-4138

Abstract: A better understanding of the dynamics involved in grain production is critical for food security and poverty reduction. To this end, several factors influence grain production, including capital (i.e. R&D investment and agricultural credit), agriculture environment (i.e. CO2 emissions), and technical progress (i.e. fertilizers and agricultural machinery). This paper analyses the combined effects of these factors on China's grain crops output from 1990 to 2017 by using the autoregressive distributed lag (ARDL) approach. The ARDL‐bounds testing approach provided the long‐run connection amid the variables. The findings include: (i) agricultural R&D spending has an encouraging and meaningful influence on grain crops yield in the long‐run and short‐run; (ii) agricultural credit significantly and positively stimulates grain crops output; (iii) CO2 emissions negatively impact grains' output in the short‐ and long‐run; (iv) area under grain crops and fertilizers used also endure a positive spur on grain crops production in the long‐run and short‐run; and (v) short‐run nexus among the variables is navigated for robustness rationale via the vector error correction model Granger causality practice. Hence, the strategy specialists should also acquaint finances through prescribed organizations on comfortable provisions and minimal interests. In addition, the Chinese Governments and agricultural extension organizations should support the easy acquisition of high‐tech cultivating machinery to harvest crops swiftly and explore substantial markets for further business.

Date: 2023
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