Land Utilization, Development Expenditure, Agricultural Productivity and Economic Growth: Evidence from Pakistan

Abstract

The main purpose of this study was investigates and explores the association between land utilization, development expenditure, agricultural production and economic growth in Pakistan based on the time series data over the year of 1983 to 2014. Data were analyzed applying the Phillips-Perron (P-P) unit root test, and results were interpreted implying the cointegration test. OLS was adopted to assess the effect of land utilization, development expenditure and agricultural productivity on economic growth of Pakistan. The estimated results of cointegration test show that there presence a long-run association among development expenditure for agricultural sector, land utilization, agricultural productivity and economic growth in Pakistan. The results of OLS regression analysis show that development expenditure and agricultural productivity have a significant impact on economic growth of Pakistan while land utilization (total land used for crops) has a positive relation with economic growth but found statistically insignificant. This study suggested that the government should increase expenditure development for growth and development of agricultural sector that will enhance the economic growth of Pakistan.