The Relationship between External Debt and Agricultural Growth in Three Developing Economies using Panel ARDL

Abstract

This study explores the complex interplay between external debt, government expenditures in Agriculture, agricultural investment, and economic growth in three developing countries (Egypt, Pakistan, and Argentina). The study uses data from the Agriculture Orientation Index, External Debt, Agricultural Capital formation coefficient, Agricultural Credit, and Agricultural Gross Domestic Product covering the period from 2002 to 2022 from the three developing countries to examine the long-run relationships between these variables. The results suggest that external debt might have a negative impact on real AGDP in the long term. On the other hand, the research finds a positive relationship between agricultural credit access with real AGDP. The study also reveals that short-term imbalances are decreasing by about 4% which means that it would take 25 years to reach a state of equilibrium in the long term.