Title: The role of agricultural credit in agricultural sustainability: dynamic causality

Authors: Festus Victor Bekun; Abubakar Hassan; Olawumi Abeni Osundina

Addresses: Department of Economics, Eastern Mediterranean University, North Cyprus, Turkey ' Department of Economics and Development Studies, Federal University Dutse, Nigeria ' Department of Economics, Eastern Mediterranean University, North Cyprus, Turkey; Economics Department, Babcock University, Ogun State, Nigeria

Abstract: This current study empirically investigates the impact of agricultural credit on agricultural development in Nigeria from 1981 to 2016 using annual time series data. Augmented Dickey-Fuller (ADF), Phillips Perron (PP) unit root tests and Kwiatkowski et al. (1992) stationarity test were used to investigate the stationarity properties of the series under review. According to the Engle-Granger and Phillip-Ouliaris cointegration tests, there exists a long-run relationship between agricultural credit and agricultural development. The long-run regression of canonical cointegration regression (CCR), dynamic ordinary least square (DOLS) and fully modified ordinary least square (FMOLS) techniques suggest a positive and statistically significant relationship between agricultural development and agricultural credit. To detect the direction of causality, this study applied the Toda-Yamamoto (1995) causality test, and the results reveal unidirectional causality running from agricultural credit to agricultural development. Thus, findings from this study validate that the agricultural credit induced agricultural development in Nigeria.

Keywords: agricultural sustainability; credit; dynamic causality; Nigeria.

DOI: 10.1504/IJARGE.2018.098026

International Journal of Agricultural Resources, Governance and Ecology, 2018 Vol.14 No.4, pp.400 - 417

Received: 03 Sep 2018
Accepted: 20 Dec 2018
Published online: 26 Feb 2019 *

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