Study of Economic Globalization and Growth of Agricultural Sector of Iran

After an inward-looking strategy during the Iran-Iraq war (1980-1988), Iran has moved towards a more liberalized and open market structure. So this paper studied the effect of the process of economic globalization on agricultural sector of Iran. Sinha’s growth model was used to estimate the relationship between globalization factors and growth in agricultural sector. The stationarity of variables, Engle-Granger’s causal relationships and co-integration relationship between variables were determined. An error correction framework was applied to capture the short-run and the long-run dynamic in the growth model. Opened economy could be a cause of investing in agricultural sector, and agricultural investment could be cause of openness. No long-run equilibrium relationship observed between FDI and agricultural value addition and between FDI and agricultural investment. Openness would increase investment and growth in agricultural sector. Agricultural growth was observed to be based on labour than the investment in short-run, whereas in long-run it is mostly based on investment.

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 Record created 2017-04-01, last modified 2018-01-22

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