How Globalization Is Related to Energy Productivity? (A Mathematical Analysis on Iran’s Agricultural Data)

Abstract

Agriculture is recognized as a key economic sector for almost all developing nations including Iran. Nowadays, world economy has been highly integrated as economic performance of a given country is more susceptible to policies taken by other countries than four decades ago. So, investigating the possible impacts of this new worldwide phenomenon (globalization) would be a vital issue. This paper is an empirical examination of the association between globalization and energy productivity in the Iran's agriculture context by using time series econometrics techniques including causality and cointegration tests for the period 1967-2018. Main results confirm existence of a unidirectional causality from globalization to agricultural energy productivity. Other findings revealed that every one percent increase in globalization index is expected to lead in 0.75 percent rise in agricultural energy productivity in the long-run. The error correction coefficient is estimated at -0.25 implying that the effect of every shock imposed on the long-run equation would be vanished in just four years.