The Relationship between Agribusiness Development and Agricultural Growth: Time Series Data from PR China

Owusu Samuel Mensah, Felicity Asiedu Appiah, Kwame Oduro Amoako, Joseph Agyapong

Abstract


The major contribution of the agricultural sector to the growth of the Chinese economy can be linked to the sector's effective linkage with the agro-industries. The sector still plays a critical role in promoting the world’s agricultural trade in the area of cereal production, meat production, and vegetable production. However, the current ranking of China as the  major  exporter of agricultural products is attributed to the long-term historical development of agriculture and agribusiness sector. The study investigates empirically the effect, the existence and direction of causal relationship between agribusiness development and agricultural growth in China by adopting granger causality test and quantile regression approach. The results of the study reveal the existence of bi-directional Granger causality running from agricultural growth to agribusiness development. The quantile regression results reveal a positive and statistically significant effect of agribusiness development on the growth of the Chinese agricultural sector.  The quantile plot further gives the graphical interpretation of the relationship between agribusiness growth and agricultural development.  

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Keywords: Agricultural Growth; Agribusiness Development; Granger causality; Quantile regression; China.


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