Determinants Of Agricultural Output In Cambodia, 1993-2015
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Date
2018-06
Authors
Kenyi, Eing
Journal Title
Journal ISSN
Volume Title
Publisher
Universiti Sains Malaysia
Abstract
Agriculture in Cambodia has been playing an essential role in the national income and production for the past few decades. Nevertheless, the continuous decline in the level of GDP contribution of agricultural output has sparked interest on how to re-improve the contribution of this sector given the fact that Cambodia has just joined the lower-middle income group levels. We believe that the agricultural sector should still be given priority alongside the manufacturing sector for the next few decades of the economic development strategy in Cambodia. To confirm this potential, the first objective of this study has been to examine factors affecting the agriculture sector; and the second objective is to investigate whether or not manufacturing sector in Cambodia is agriculture-led. Autoregressive distributed lag (ARDL) model and Toda-Yamamoto causality test have been employed to study the case for the period from 1993 to 2015. The results, firstly demonstrate that all factors under study are crucial for agriculture output but the negative effect of manufacturing has been the most striking outcome that against my hypothesis. We further examine the causality between agriculture and manufacturing and observed that there are bi-directional causalities between manufacturing and agriculture. This implies that an increment in the agriculture output can further support the raw products of the manufacturing output. Conversely, manufacturing can support the production of the agriculture sector via the demand for agricultural products. However, manufacturing output had a negative and significant effect on agricultural output. This finding is rather surprising, considering that most of the manufacturing sector is agriculture-based in Cambodia. Therefore, the government should design policies that could encourage local manufactures to use more local content and to be more focused on what agriculture should produce so that those highly demanded outputs of agriculture can be supplied.
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Keywords
Determinants of agricultural output , sparked interest on how to re-improve