The Granted Effects of Agricultural Bank Credits on Total Factor Productivity in Agriculture Production

Abstract

The present study examined the effect of agricultural bank credit on the productivity of production factors in the agricultural sector over the period 1971-2012 using the Auto Regression pattern with wide interruptions. Solow residual model has been used to calculate the growth rate of total factor productivity of agricultural sector. The results showed that credit variable in the both long-term and short-term has a positive effect on total production factors productivity in the agricultural sectors of Iran. Therefore, an increase in credits granted to the agricultural sector has caused to enhance the growth of these sectors and increase total productivity of production factors in the agricultural sector. The effect of energy consumption, exports of agricultural sector, research and development expenditures in the agricultural sector are also positive on total productivity of production factor in the short and long term. But, in the long run, impact of liquidity and oil income on total productivity production factor in the agricultural sector is negative. Therefore, planning in this regard is important.