Agriculture investment, output growth, and CO2 emissions relationship

Abstract

The purpose of this study is to examine the dynamic relationships between foreign investments in agriculture, domestic investments in agriculture, agricultural output, and greenhouse gases emissions from agriculture for a panel of countries over the period of 1990–2007. The panel cointegration and panel causality tests are applied in this study. The results show that there is a long-run causal relationship among all variables. The short-run dynamics suggest that there is a bidirectional causality relationship between agricultural output and greenhouse gases emissions from agriculture while there is no causal relationship between foreign investments in agriculture and domestic investments in agriculture as well as foreign investments in agriculture and greenhouse gases emissions from agriculture. It is also found that there is unidirectional short-run causal relationship from agricultural output to domestic investments in agriculture. The results provide some important implications for policy-makers.