The Impact of Banking Credit on Iranian Agricultural Growth with Emphasis on the Role of Bank Ownership: A MIDAS-GARDL Approach

Document Type : Research Paper

Authors

1 1. Corresponding Author, PhD Student, Department of Agricultural Economics, Payamenoor University, Tehran, Iran.

2 Assistant Professor, Department of Agricultural Economics, Payamenoor University, Tehran, Iran.

3 Associate Professor, Department of Agricultural Economics, Payamenoor University, Tehran, Iran.

Abstract

Introduction: Given to economic sanctions as well as the emphasis of policy makers on the resistance economy and national production, it is important to identify the factors affecting the agricultural growth. One of these factors is banking credit. Despite the relative consensus of economists on the positive impact of banking credit on macroeconomic variables, some of them believe in the difference between the impact of public and private bank lending on economic growth and employment.  Therefore, the purpose of this study is to investigate the impact of banking credit on Iranian agricultural growth sector by considering the role of bank ownership
Materials and Methods: In this study, the data for the fourth quarter of 1388 (2009) to the first quarter of 1397 (2018) and the MIDAS-GARDL method were used
Findings: The results showed that the credit granted by state-owned banks have a greater impact on the growth of the agricultural sector compared to the credit of private banks
Conclusion:  It is suggested that state-owned banks have a greater share in the payment of banking facilities to the agricultural sector.
 

Keywords

References

  1. Eftekhari, M. Purtaheri, M. Farajzadeh, and S. Vakil Heydari, “The Role of Empowerment in Agricultural Development, Case Study: Ardabil Province,” Hum. Geogr. Res., vol. 3, no. 69, pp. 87–104, 2009.
  2. Eskandari and G. Dinpanah, “Investigating the Factors Affecting Motivation for Rural Youth Employment in Agricultural Activities in Isfahan Province,” Agric. Promot. Rural Dev., vol. 1, no. 270, pp. 150–161, 2006.
  3. Griffin, “International Implications of the Green Revolution,” in The Political Economy of Agrarian Change: An Essay on the Green Revolution, K. Griffin, Ed., London: Palgrave Macmillan UK, 1979, pp. 143–172. doi: 10.1007/978-1-349-16176-8_6.
  4. Irz, L. Lin, C. Thirtle, and S. Wiggins, “Agricultural Productivity Growth and Poverty Alleviation,” Dev. Policy Rev., vol. 19, no. 4, pp. 449–466, 2001, doi: https://doi.org/10.1111/1467-7679.00144.
  5. Fattahi Tughraljerdi and p Nabi Yian, “The Impact of Agricultural Exports on Credits with Emphasis on Subsectors,” Agric. Econ. Res., vol. 3, no. 35, pp. 57–74, 2017.
  6. . Coase, “The Problem of Social Cost,” J. Law Econ., vol. 3, no. 1, pp. 1–44, 1960.
  7. Levy-Yeyat, A. Micco, and U. Panizza, “A Reappraisal of State-Owned Banks,” Econ. J., vol. Volume 7 Number 2, no. Spring 2007, pp. 209–259, 2007, [Online]. Available: https://econpapers.repec.org/RePEc:col:000425:008639
  8. A. Aboutorabi, M. A. Falahi, M. Salimifar, and S. M. Hosseini, “The Effect of Government Ownership of Banks on the Causality of Finance-Growth in Iran,” Econ. Res., vol. 15, no. 4, pp. 99–126, 2016, Accessed: Jun. 16, 2023. [Online]. Available: https://ecor.modares.ac.ir/article-18-3308-en.html
  9. Andrianova, P. O. Demetriades, and A. Shortland, “Government Ownership of Banks, Institutions, and Financial Development,” Emerg. Mark. Econ., 2006.
  10. Onder and S. Ozyildirim, “Banks, Regional Development Disparity and Growth: Evidence from Turkey,” Cambridge J. Econ., vol. 34, pp. 975–1000, Jun. 2009, doi: 10.1093/cje/bep077.
  11. Berkowitz, M. Hoekstra, and K. Schoors, “Bank privatization, finance, and growth,” J. Dev. Econ., vol. 110, no. C, pp. 93–106, 2014, [Online]. Available: https://econpapers.repec.org/RePEc:eee:deveco:v:110:y:2014:i:c:p:93-106
  12. Dong, Z. Liu, Z. Shen, and Q. Sun, “Does State Ownership Really Matter in Determining Access to Bank Loans? Evidence from China’s Partial Privatization,” Pacific-Basin Financ. J., vol. 40, pp. 73–85, Jun. 2016, doi: 10.1016/j.pacfin.2016.09.001.
  13. Davydov, “Does State Ownership of Banks Matter?: Russian Evidence from the Financial Crisis,” J. Emerg. Mark. Financ., vol. 17, p. 097265271877686, Jun. 2018, doi: 10.1177/0972652718776862.
  14. Arora and K. A. Wondemu, “Do public sector banks promote regional growth? Evidence from an emerging economy,” 2018, [Online]. Available: http://hdl.handle.net/10454/15140
  15. E. Emenuga, “Effect of Commercial Banks’ Credit on Agricultural Productivity in Nigeria,” Acta Univ. Danubius. OEconomica, vol. 15, no. 3, pp. 417–428, 2019.
  16. M. Islam, “Agricultural Credit and Agricultural Productivity in Bangladesh: An Econometric Approach ,” Int. J. Food Agric. Econ. , no. 1128-2020–1530, Jul. 2020, doi: https://doi.org/10.22004/ag.econ.305327.
  17. Nakazi and N. Sunday, “The Effect of Commercial Banks’ Agricultural Credit on Agricultural growth in Uganda,” African J. Econ. Rev., no. 2050-2020–268, 2020, doi: https://doi.org/10.22004/ag.econ.301056.
  18. Osabohien, A. Mordi, and A. Ogundipe, “Access to credit and agricultural sector performance in Nigeria,” African J. Sci. Technol. Innov. Dev., vol. 14, no. 1, pp. 247–255, 2022, doi: 10.1080/20421338.2020.1799537.
  19. K. Tayyebi, M. Sateei, and P. Samimi, “The impact of banking credit on the employment of economic sectors in Iran,” J. Money Econ., vol. 2, no. 4, pp. 1–33, 2010.
  20. S. Renani, A. Tavakoli, and N. Honarvar, “Effect of Agricultural Credit Banks on the Value Added of Agricultural Sector in Iran,” Agric. Econ. Dev., vol. 21, no. 4, pp. 201–227, 2014, doi: 10.30490/AEAD.2014.58725.
  21. Azizi and H. Mehrabi Boshrabadi, “The Effect of Agricultural Bank’s Credit on Agricultural Growth,” J. Rural Dev. Strateg., vol. 1, no. 4, pp. 1–11, 2014.
  22. Arabmzar, S. Ranjbar, and P. Nejadaghaeianvash, “The Impact of Banking Credit of Bank Keshavarzi on Value Added and Employment of the Agricultural Sector,” J. Econ. Model., vol. 9, no. 3, pp. 131–183, 2018, [Online]. Available: https://ecoj.sbu.ac.ir/article_81625.html
  23. hamid zolghadr, H. Asgharpur, M. Purebadolahan, B. Salmani, and A. Farzinvash, “Studying the Role of Bank Ownership in the Effect of Bank Credit on Economic Growth According to the Level of Provinces Income,” Growth Dev. Res., vol. 9, no. 34, pp. 15–34, 2019, doi: 10.30473/egdr.2019.4694.
  24. Shakeri Bostan abad and M. Salehi Komroudi, “Factors Affecting the Growth of Iran’s Agricultural Sector: Applying the Bayesian Model Averaging Approach,” Iran. J. Agric. Econ. Dev. Res., vol. 51, no. 3, pp. 451–467, 2020, doi: 10.22059/ijaedr.2020.289249.668812.
  25. roya aleemran and seyed ali aleemran, “The Economic Factors Affecting the Value Added of Iran’s Agricultural Sector,” Econ. Res., vol. 13, no. 1, pp. 191–206, 2021, [Online]. Available: https://jae.marvdasht.iau.ir/article_4356.html
  26. Önder and S. Özyildirim, “Role of bank credit on local growth: Do politics and crisis matter?,” J. Financ. Stab., vol. 9, no. 1, pp. 13–25, Apr. 2013, doi: 10.1016/J.JFS.2012.12.002.
  27. Daiei Karimzade and A. Gorjizade, “Impact of the Expansion of Private Banks Share in Banking System on Non-performing Loans in Iran,” J. Monet. Bank. Res., vol. 8, no. 26, pp. 571–593, 2015.
  28. Gojarati, Basic Econometric (translation by Hamid Abrishami), vol. 5. 2008.
  29. Granger and P. Newbold, “Spurious regressions in econometrics,” J. Econom., vol. 2, no. 2, pp. 111–120, 1974, [Online]. Available: https://econpapers.repec.org/RePEc:eee:econom:v:2:y:1974:i:2:p:111-120
  30. H. Stock and M. W. Watson, “Testing for common trends,” J. Am. Stat. Assoc., vol. 83, no. 404, pp. 1097–1107, 1988.
  31. Phillips and M. Loretan, “Estimating Long-run Economic Equilibria,” Rev. Econ. Stud., vol. 58, no. 3, pp. 407–436, 1991, [Online]. Available: https://econpapers.repec.org/RePEc:oup:restud:v:58:y:1991:i:3:p:407-436.
  32. Hylleberg, R. Engle, C. Granger, and B. S. Yoo, “Seasonal integration and cointegration,” J. Econom., vol. 44, no. 1–2, pp. 215–238, 1990, [Online]. Available: https://econpapers.repec.org/RePEc:eee:econom:v:44:y:1990:i:1-2:p:215-238
  33. Noferesti, Applied Econometrics of Time Series, 1st ed. Tehran: Beheshti University, 2021.
  34. Ghysels and R. Valkanov, “Forecasting volatility with MIDAS,” Handb. volatility Model. their Appl., pp. 383–401, 2012.
  35. [35] F and R. Moghaddasi, “The effect of energy price on grain price using regression models with mixed data (Generalized ARDL method based on OLS),” Appl. Econ. Stud. Iran, vol. 4, no. 15, pp. 149–160, 2015.
  36. Trujillo-Barrera and J. M. E. Pennings, “Energy and Food Commodity Prices Linkage: An Examination with Mixed-Frequency Data,” 2013.
  37. T. Armesto, K. Engemann, and M. Owyang, “Forecasting with mixed frequencies,” Review, vol. 92, no. Nov, pp. 521–536, 2010, [Online]. Available: https://econpapers.repec.org/RePEc:fip:fedlrv:y:2010:i:nov:p:521-536:n:v.92no.6
  38. W. J. Granger, P. Newbold, and J. Econom, “Spurious regressions in econometrics,” A Companion to Theor. Econom., pp. 557–561, 2001.
  39. Piri, E. Javdan, and S. Faraji Dizaji, “The Effect of Oil Export Fluctuations on Agricultural Growth in Iran,” J. Agric. Econ. Dev., vol. 25, no. 3, p., 2011, doi: 10.22067/jead2.v1390i3.10808.
  40. R. Lotfalipour, Y. Azarinfar, and R. Mohammadzadeh, “The impact of government expenditure on the overall economic growth and the growth of the Agricultural Sector in Iran Economic Growth in Iran,” J. Agric. Econ. Dev., vol. 26, no. 2, pp. 86–96, 2012, doi: 10.22067/jead2.v1391i2.15803.
  41. . Karbasi and M. Peyrovi, “No Title). The Impact of Trade Liberalization on Iranian Agriculture,” Agric. Econ., vol. 2, no. 2, pp. 19–34, 2008.
  42. samaneh khalili and mohammad ghahremanzadeh, “Study the Theory of Export-Led Growth in the Agriculture Sector in Iran: Evidence from Structural VAR Model (SVAR) and Directed Acyclic Graphs (DAG),” Econ., vol. 10, no. 4, pp. 81–99, 2017, doi: 10.22034/iaes.2017.19422.
  43. Pishbahar, S. Bodagh, and G. Dashti, “Forecasting Iran’s Agricultural Sector Growth: Using Mixed-frequency Data Sampling (MIDAS) Model,” Econ. Res., vol. 19, no. 3, pp. 145–161, 2019, Accessed: Jun. 16, 2023. [Online]. Available: https://ecor.modares.ac.ir/article-18-19545-en.html
Agricultural Economics Research
Volume 15, Issue 2
July 2023
Pages 86-73

Files

History

  • Receive Date: 05 June 2021
  • Revise Date: 11 August 2021
  • Accept Date: 14 August 2023

Share

How to cite

Statistics