Causation Between Gross Investment and Agricultural Productivity

Abstract

The study investigates the recent trend and relationship between gross investment and agricultural productivity in Bangladesh. The study applies descriptive statistic techniques to describe the recent trend and ARDL bound testing approach to find the causation by using annual time series for the period of 1993 to 2022. In the first step, the study finds that Bangladesh is observing continuous growth in food production, where rice is the dominant crop, with a gradual increase in other seed production. Secondly, the results from the ARDL bound test state that there exists a long-run relationship between gross investment and agricultural productivity, but the exciting fact is that gross investment has a negative impact on agricultural productivity in Bangladesh because the country is observing structural change in policy regime towards industrialization such that increase in gross investment discourages agricultural sector. Therefore, it is recommended to set greater budgetary investment specifically for the agriculture sector to improve agricultural productivity in Bangladesh.