Research Article
Agricultural Economics
Roohollah Babaki; Mahnaz Efati
Abstract
1. TitleThe Impact of Foreign Direct Investment and Trade Openness on the Performance of Iran's Agricultural Sector2. IntroductionGiven the significance of FDI and trade openness in the economy, and the uncertainty surrounding their definitive effects on the performance of the agricultural sector from ...
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1. TitleThe Impact of Foreign Direct Investment and Trade Openness on the Performance of Iran's Agricultural Sector2. IntroductionGiven the significance of FDI and trade openness in the economy, and the uncertainty surrounding their definitive effects on the performance of the agricultural sector from a theoretical perspective, this study employs the Auto Regressive Distributed Lag (ARDL) method to experimentally examine the impact of foreign direct investment and trade openness on the growth of Iran's agricultural sector's gross domestic product during the period from 1970 to 2022.3. Materials and MethodsThe model utilized in this research is based on the study by Sultana and Sadkin (2023) as follows:The variables employed in this research include: AFF: agricultural production growth, FDI: foreign direct investment, GDP: gross domestic product (economic growth), CPI: inflation rate, TRADE: degree of trade openness (free trade), GFC: gross fixed capital formation, and : stochastic term. The necessary data were gathered from the World Bank for the period from 1970 to 2022.4. Results and DiscussionIn this research, the generalized Dickey-Fuller tests were employed to assess the stationarity of the time series and the presence of unit roots. The order of their aggregation was determined accordingly. The generalized Dickey-Fuller test indicates that at a significance level of 5%, all variables, except for the growth of the agricultural sector with a one-time difference, are stationary in both the cases of having an intercept without a trend and having an intercept with a trend. Based on the results of the generalized Dickey-Fuller unit root tests, the accumulated model variables are of order one and zero. Consequently, the ARDL method is applied in this research.To estimate long-run coefficients, it is essential to first verify the existence of a long-run relationship. Therefore, the F-Bound test introduced by Pesaran, Shin, and Smith (2001) is also utilized. This method confirms the existence of a long-run equilibrium relationship among the model's variables.The results of the LM test indicate that there is no autocorrelation among the residuals in the examined model. In fact, the null hypothesis of no autocorrelation is not rejected. Additionally, the results of the heteroscedasticity test suggest that the null hypothesis of the absence of heteroscedasticity is not rejected, indicating homogeneity of variance. The following table presents the results of model estimation using the ARDL method.Model estimation results using the ARDL methodLong-run relationshipVariables Coefficients standard deviation t-Student Prob.FDI 22.91 6.25 3.66 0.00GDP 1.36 0.39 3.48 0.00GFC 0.82 0.38 2.14 0.05INF -0.37 0.13 -2.68 0.02TRADE 0.16 0.15 1.04 0.32C 67.43 11.57 5.82 0.00Source: Research findingsThe error correction model is employed to assess how short-run imbalances of dependent variables are corrected towards long-run equilibrium. The results from estimating the error correction model indicate that the coefficient of the error correction term in the model is -0.20. This means that in each period, 20% of the imbalance in the agricultural sector is corrected, moving closer to its long-run equilibrium trend. To ensure the stability of the estimated regression coefficients and the accuracy of the results obtained, stability tests, including cumulative residual (CUSUM) and cumulative residual squared (CUSUMSQ), are conducted for the residuals of the short-run model. The results confirm the stability of the estimated coefficients during the studied period.5. ConclusionThe findings of this research indicate that foreign direct investment (FDI) has a positive and significant impact on the long-term production growth of Iran's agricultural sector. However, commercial openness does not have a significant effect on the growth of production in this sector over the long run. Additionally, gross domestic product (economic growth) and gross fixed capital positively and significantly influence agricultural production growth. Conversely, the inflation rate negatively and significantly affects the production growth of the agricultural sector.6. AcknowledgementGiven the positive and significant impact of FDI on agricultural production in the long run, it is essential to attract appropriate and efficient foreign direct investment to enhance local employment and investment, thereby boosting production and productivity in Iran's agricultural sector. Consequently, it is recommended that policymakers refine their strategies to foster an environment conducive to attracting foreign direct investment in agriculture, aiming to draw in more effective investments to elevate agricultural productivity. In this context, the country can adjust its tax and agricultural investment policies to establish a "suitable investment environment" that encourages long-term foreign investments in the agricultural sector. Furthermore, the government should implement policies aligned with agricultural needs and initiate relevant and practical training programs for farmers to enhance agricultural skills, enabling FDI to further develop the nation's agricultural sector. Additionally, to bolster the country's economic growth within the agricultural sector, innovative methods must be adopted to attract foreign direct investment. The lack of a significant effect of trade openness on the production of Iran's agricultural sector underscores the necessity to reassess the country's free trade policy to support various segments of the agricultural sector, thereby increasing production and improving the overall performance of agriculture.7. Keywords:Foreign Direct Investment (FDI), Trade Openness, Agricultural Production Growth, Auto Regressive Distributed Lag (ARDL).
Research Article
Agricultural Economics
mehdi mogaddam
Abstract
The Real Effective Exchange Rate (REER) is a measure that evaluates the value of a country's currency against a basket of other currencies, taking into account differences in domestic and foreign price levels or inflation. It serves as an indicator to compare the economic competitiveness of a country ...
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The Real Effective Exchange Rate (REER) is a measure that evaluates the value of a country's currency against a basket of other currencies, taking into account differences in domestic and foreign price levels or inflation. It serves as an indicator to compare the economic competitiveness of a country in international trade.The main purpose of this study is to investigate the impact of real effective exchange rate uncertainties on the amount of investment in the agricultural sector by provinces of the country, during the years 1387 to 1402. Therefore, first, currency uncertainties were calculated with the help of EGARCH(1,1) generalized autoregressive variance variance model and entered as an explanatory variable in the model, and then using panel data based on patterns with variable coefficients, with estimators Swamy's two-stage model, its impact along with other variables of the model on investment in the country's agricultural sector has been evaluated. The results of this study show that the effect of the variables of the GDP of the agricultural sector of the provinces, interest rate, bank credits on the amount of investment in the agricultural sector of the provinces was significant. Also, the uncertainty variable of real effective exchange rate has a positive and significant effect on agricultural investment in Isfahan and West Azerbaijan provinces, while it has a negative effect on agricultural investment in Semnan, Sistan and Baluchistan, Mazandaran, East Azerbaijan and Kermanshah provinces. Therefore, it is necessary that the government and economic policy makers refrain from making decisions that cause more volatility in the currency market in order to prevent capital outflow from the agricultural sector as the basis of the country's economy.The Real Effective Exchange Rate (REER) is a measure that evaluates the value of a country's currency against a basket of other currencies, taking into account differences in domestic and foreign price levels or inflation. It serves as an indicator to compare the economic competitiveness of a country in international trade.The main purpose of this study is to investigate the impact of real effective exchange rate uncertainties on the amount of investment in the agricultural sector by provinces of the country, during the years 1387 to 1402. Therefore, first, currency uncertainties were calculated with the help of EGARCH(1,1) generalized autoregressive variance variance model and entered as an explanatory variable in the model, and then using panel data based on patterns with variable coefficients, with estimators Swamy's two-stage model, its impact along with other variables of the model on investment in the country's agricultural sector has been evaluated. The results of this study show that the effect of the variables of the GDP of the agricultural sector of the provinces, interest rate, bank credits on the amount of investment in the agricultural sector of the provinces was significant. Also, the uncertainty variable of real effective exchange rate has a positive and significant effect on agricultural investment in Isfahan and West Azerbaijan provinces, while it has a negative effect on agricultural investment in Semnan, Sistan and Baluchistan, Mazandaran, East Azerbaijan and Kermanshah provinces. Therefore, it is necessary that the government and economic policy makers refrain from making decisions that cause more volatility in the currency market in order to prevent capital outflow from the agricultural sector as the basis of the country's economy.The Real Effective Exchange Rate (REER) is a measure that evaluates the value of a country's currency against a basket of other currencies, taking into account differences in domestic and foreign price levels or inflation. It serves as an indicator to compare the economic competitiveness of a country in international trade.The main purpose of this study is to investigate the impact of real effective exchange rate uncertainties on the amount of investment in the agricultural sector by provinces of the country, during the years 1387 to 1402. Therefore, first, currency uncertainties were calculated with the help of EGARCH(1,1) generalized autoregressive variance variance model and entered as an explanatory variable in the model, and then using panel data based on patterns with variable coefficients, with estimators Swamy's two-stage model, its impact along with other variables of the model on investment in the country's agricultural sector has been evaluated. The results of this study show that the effect of the variables of the GDP of the agricultural sector of the provinces, interest rate, bank credits on the amount of investment in the agricultural sector of the provinces was significant. Also, the uncertainty variable of real effective exchange rate has a positive and significant effect on agricultural investment in Isfahan and West Azerbaijan provinces, while it has a negative effect on agricultural investment in Semnan, Sistan and Baluchistan, Mazandaran, East Azerbaijan and Kermanshah provinces. Therefore, it is necessary that the government and economic policy makers refrain from making decisions that cause more volatility in the currency market in order to prevent capital outflow from the agricultural sector as the basis of the country's economy.
Research Article
Agricultural Economics
Parvin Ghaderi nejad; somayeh shirzadi Laskookalayeh; Mostafa Mardani Najafabadi; Fateme Kashiri kolaei
Abstract
The existence of limitations such as the scarcity of resources such as water and energy has led to the use of methods to improve the productivity of production factors such as water and energy, and generally because the inputs used for production are limited and scarce, farmers and planners of the agricultural ...
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The existence of limitations such as the scarcity of resources such as water and energy has led to the use of methods to improve the productivity of production factors such as water and energy, and generally because the inputs used for production are limited and scarce, farmers and planners of the agricultural economic sector have always been looking for ways to achieve greater production by using less input, especially scarce inputs. Therefore, achieving effective and sustainable management of water and energy has been one of the global challenges in recent decades. Dehloran region, as an agricultural hub and the largest agricultural sector of Ilam province, is located in the south of this province. The decrease in rainfall in recent years and climate change have also affected the agricultural sector of the Dehloran region. Given that the Dehloran region is located in the path of permanent and seasonal rivers, and also due to its proximity to Khuzestan Province and the benefit of water from the Karkheh Dam, unfortunately, due to the lack of sufficient infrastructure, irrigation channels, and sufficient dams, these water resources are not used optimally. Therefore, it seems necessary to pay attention to the sustainability of agriculture in this region through the improvement and proper management of water and energy resources and the promotion of their productivity. Therefore, in the present study, an attempt was made to consider economic and environmental goals in the form of a multi-objective planning model with an emphasis on the management of water and energy resource consumption. Therefore, considering the necessity of the subject, the effect of determining the optimal cultivation pattern on water and energy productivity in the production of crops was investigated.
Materials and Methods
In the present study, a multi-objective nonlinear mathematical programming model has been used to simultaneously achieve multiple goals that are subject to a certain set of constraints. In the present study, considering the regional conditions and the importance of the issue, four goals were used, including maximizing gross profit, maximizing production, minimizing energy consumption, and minimizing water consumption. Considering the aforementioned goals, considering several different goals leads to a model in the form of a multi-objective programming. Considering the objective functions and regional conditions, constraints were defined, including water, labor, poison, fertilizer, machinery, land, and maximum and minimum production of agricultural products. Physical and economic productivity indices of water and energy were also used to calculate productivity. GAMS software was also used to run the model.
Results and Discussion
In Dehloran region, there are five important agricultural sectors including Anaran, Dasht-e Abbas, Musian, Zarinabad and Meimeh. If the multi-objective optimal model is implemented in the aforementioned sectors, an increase of 7.31, 0.74, 2.57, 6.62 and 29.78% of the cultivated area is observed, respectively. In the autumn group of crops, this increase is for irrigated wheat, rainfed and grain corn, and in summer crops, it includes profitable crops such as watermelon, melon, onion, potato, cucumber and cotton. The results of the research also showed that by considering the multi-objective optimal model, important variables such as total cultivated area, total production and gross profit show an increase of 3.85, 8.48 and 4.70 respectively. Also, the implementation of the optimal cultivation pattern improved the physical and economic productivity of water and energy by 22.09, 17.84, 10.16 and 6.33. This improvement was able to save 11.14 and 1.52 percent in water and energy consumption. In terms of energy consumption, chemical fertilizer input accounted for the highest share of total energy resources with a share of about 0.44 percent. Fuel and electricity input energy is in second priority with a share of about 0.33 percent. This is while the use of fuel and electricity input in the optimal model is about 88.5 percent less than the current one. Also, the lowest share of total energy consumption is related to the energy source of animal manure and labor. Implementing an optimal cultivation pattern based on multi-objective planning models in the Dehloran region by reducing water and energy consumption and increasing the productivity of these inputs while increasing total production and gross profit in the region can be an important step in advancing the goals of the region. Also, the results of implementing water inventory reduction scenarios also indicate that a 30% reduction in water inventory reduces total production, total gross profit, energy and water consumption by about 0.6, 1.5, 2 and 21%, respectively. However, water and energy productivity increases in the scenarios under study. Therefore, it can be said that by implementing the optimal cultivation pattern in the Dehloran region, while reducing water and energy consumption, it has also achieved an increase in productivity. Which can be an important step in advancing the goals of the region.
Conclusion
Considering the main objective of the research, which is to investigate the effect of determining the optimal cultivation pattern on water and energy productivity in crop production. After implementing the multi-objective mathematical programming model, the physical and economic productivity indicators of water and energy show an increase, and water and energy consumption is also saved. By implementing this model and proper management, appropriate savings can be achieved in the field of water consumption. Using multi-objective optimal models in the region can, in addition to increasing gross profit in the region, reduce water and energy consumption and increase physical and economic productivity in the region. Accordingly, it is suggested that the optimal cultivation pattern obtained in the region be used to increase farmer's profit, reduce water and energy consumption, and increase regional productivity. Similarly, holding extension classes to raise awareness in determining the optimal consumption of inputs and changing the cultivation pattern under the supervision of agricultural Jihad experts can be an effective step in advancing the appropriate goal of implementing an optimal cultivation pattern that matches the conditions of the desired region.
Research Article
Agricultural Economics
behnaz nazerani; javad hosseinzad; Muhammad Ghahremanzadeh
Abstract
1. Introduction
The agricultural sector in developing countries, including Iran, has not been able to benefit from its presence in the stock market due to the lack of supporting infrastructure, active capital supply companies, weakness in financial literacy, inadequate technical knowledge, and lack of ...
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1. Introduction
The agricultural sector in developing countries, including Iran, has not been able to benefit from its presence in the stock market due to the lack of supporting infrastructure, active capital supply companies, weakness in financial literacy, inadequate technical knowledge, and lack of proper understanding of environmental conditions. Also, over the past ten years, agricultural sector firms have recorded the lowest sales among listed companies. Severe price fluctuations, lack of transparency and information flow in local agricultural product markets, and the widespread presence of brokers and intermediaries in various sectors of distribution and sales of these products are among the problems that have severely weakened the position of agricultural sector firms in the stock market. So, over the past ten years, agricultural sector firms have recorded the lowest sales among listed companies.These problems have mainly affected the agricultural sector of Iran in the absence of a coherent, organized and competitive market. The stock market, by using trading tools and methods, can significantly solve these problems by creating a competitive, transparent and efficient market and provide a very strong potential for agricultural enterprises to enter the stock market in Iran. Entering the stock market and offering shares of agricultural enterprises, in addition to providing capital, will lead to the discovery of the real price of shares and greater prosperity and profitability, and ultimately increasing the financial performance of these enterprises. There is. In order to better understand and further investigate this issue, the present study attempts to study the exact relationship between financial performance and stock price.
2. Materials and Methods
In the present study, the simultaneous equations method has been used to examine the relationship between stock prices and financial efficiency of agricultural firms and companies. In the present study, four financial ratios such as return on assets ratio, total asset turnover ratio, debt-to-capital ratio and Tobin's Q ratio have been used to measure financial efficiency. Also, in the system, a set of control variables that affect the stock prices of companies were considered, such as liquidity, financial leverage, company size and history, sales growth, company cash flow, and profit performance or efficiency. Statistics and information related to performing calculations and estimating models have been collected from various relevant sources and organizations such as Tehran Stock Exchange, Central Bank and Ministry of Agricultural Jihad.
3. Results and Discussion
The results of the system estimation using simultaneous equations have shown that there is a positive and significant relationship between return on assets, asset turnover ratio, debt-to-equity ratio, and Tobin's Q with stock price. While the relationship between debt-to-equity ratio and stock price has been negative and significant. This indicates the importance of paying attention to financial efficiency in determining the value of companies' stocks. In fact, improving financial efficiency makes the company's stocks more valuable to customers. That is, the better the company's financial performance or efficiency, the more investors who are interested and need to buy shares in the company, which also leads to an increase in stock price. An increase in stock price also leads to an improvement in financial ratios, which also requires an increase in financial performance. This shows the importance of considering financial efficiency in determining the value of company shares. In fact, improving financial efficiency makes the shares of companies and firms more valuable to customers. That is, the better the company's financial performance or efficiency, the more investors who are interested and have a demand to buy shares in the company, which also leads to an increase in the stock price. Changes in stock prices affect financial ratios, and these ratios can be used in the evaluation and analysis of companies and investments.
4. Conclusion
Stock price and financial efficiency are interrelated. In other words, stock price de-graphication increases financial efficiency by improving financial ratios. Improving financial ratios and increasing financial efficiency also increase shareholders' expectations for profit and capital increase if the company's financial ratios improve. This also increases the demand for shares and ultimately increases the value and price of shares. By examining the factors affecting financial efficiency and stock price and their relationship in agricultural enterprises, it is possible to identify and eliminate the causes of the decline in the acceptance of agricultural enterprises by the stock market and to encourage and facilitate the presence of these enterprises in the stock market by removing obstacles.
