Exploring the long-run relationship between financial inclusion and agricultural growth: evidence from Pakistan

Abstract

Purpose

This study aims to investigate the long-run relationship between financial inclusion and agricultural growth in Pakistan for the period of 1960–2018.

Design/methodology/approach

The autoregressive distributed lag (ARDL) approach, the Johansen co-integration test and the dynamic ordinary least squared (DOLS) method are used for the evaluation.

Findings

The results show that in both short- and long run, domestic credit has a significantly negative impact on the agricultural growth, while broad money and cropped area positively affected the agricultural growth in Pakistan in both cases.

Practical implications

The government and policymakers need to develop strategies that bring together agriculturalists on a single platform so that the government can clearly distinguish the interests of these farmers and can obtain precise information for allocating agricultural expenditure and easing access to credit for small-scale agriculturalists.

Originality/value

This is the first study to evaluate the impact of financial inclusion on the agricultural growth in Pakistan by using different econometric techniques, including the ARDL-bound approach, Johansen co-integration test and DOLS method.

Citation

Farooq, U., Gang, F., Guan, Z., Rauf, A., Chandio, A.A. and Ahsan, F. (2023), "Exploring the long-run relationship between financial inclusion and agricultural growth: evidence from Pakistan", International Journal of Emerging Markets, Vol. 18 No. 7, pp. 1677-1696. https://doi.org/10.1108/IJOEM-06-2019-0434