Efficiency of Agricultural Investment and its Role in Economic Development in Egypt

Abstract

This research aims to study the standards of agricultural investment efficiency in Egypt, as well as estimate the economic growth function by studying the relationship between GDP and both government and private agricultural investment. This will be done using investment efficiency standards and standard measurement methods based on time series analysis, unit root tests, and cointegration tests. The causal relationship between agricultural GDP and both government and private agricultural investment will also be studied. The study results show that all study variables have shown a generally increasing and statistically significant trend. Unit root tests have shown that all standard model variables suffer from instability at their levels and first differences, while they stabilize at their second differences. The cointegration test has shown that there is more than one cointegrating vector at a 5% significance level, rejecting the null hypothesis and accepting the alternative hypothesis. This confirms the existence of a long-term equilibrium relationship between the variables in the model. The cointegration equation indicates the impact of each variable on agricultural GDP in the long term, showing that the impact of government agricultural investment is greater than the impact of private agricultural investment on agricultural GDP, with a coefficient of about 0.18 for government investment and 0.13 for private investment. Therefore, the combined effect of both government and private agricultural investment on agricultural GDP is considered weak and insufficient to achieve the desired economic growth.

Keywords

• investment multiplier
• endemic factors
• investment rate
• capital intensification