NEXUS BETWEEN INVESTMENT AND AGRICULTURAL GROWTH IN THE DEMOCRATIC REPUBLIC OF CONGO: COINTEGRATION, SHORT-RUN DYNAMICS AND CAUSALITY
Abstract
This paper aims to assess the impact of agricultural investment on agricultural output in the Democratic Republic of Congo using secondary data for the period 1980 to 2019. Using the Johansen and Jusseleus cointegration test, agricultural investment and agricultural output were observed to have a statistically significant long-run relationship. Additionally, the error correction model (ECM) shows that the short-run coefficient of agricultural investment has a statistically significant positive impact on agricultural output, implying that investment (machine, infrastructure etc.) does spur agricultural output in the Democratic Republic of Congo. The results show the presence of unidirectional causality between agricultural output toward agricultural investment. It was also observed that unidirectional causality from labour force to agricultural investment, labour force to education and agricultural investment to land use and a bi-directional causality between land use and labour force exists. The paper concludes that an increase in investment in the agricultural sector will result in agricultural output in the Democratic Republic of Congo.
Keywords
agricultural growth; agricultural investment; cointegration; granger causality; VECM; the Democratic Republic of Congo
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Uniuversity of South Africa South Africa
Uniuversity of South Africa South Africa
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