Causal relationship between agricultural exports and economic growth: a diagnostic approach

This study attempts to investigate the causal relationship that exists between agricultural exports and economic growth for the time period starting from 1992-93 to 2018-19. Gross Domestic Product (GDP) has been used as the proxy of the economic growth. The study applied the unit root testing for checking the stationarity of the data which comes out to be integrated at level 2. The study used Johansen co-integration test to understand if there is any co-integration between the two variables of the study i.e. agricultural exports and economic growth. Vector Error Correction Model has been used to know if there is short run or long run causality between them. The results revealed that there is short run causality between the taken variables when GDP is taken as independent and agricultural exports as dependent variable but not vice-versa. Granger-Causality test shows that there is unidirectional causality running from gross domestic product to exports of agricultural products. The study would help in policy formulation in a way that gives boost to economic growth and thus the agricultural exports