Financial development, trade globalisation and agricultural output performance among BRICS and WAMZ member countries

Onyebuchi Iwegbu and Leonardo Bornacki Mattos
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Leonardo Bornacki Mattos: Universidade Federal de Viçosa

SN Business & Economics, 2022, vol. 2, issue 8, 1-27

Abstract: Abstract This study examines the impact of financial development and globalisation on agricultural output performance of BRICS and WAMZ member countries. Secondary data for WAMZ and BRICS countries obtained from the World Bank were used in this analysis. Fixed effect panel regression analysis and the dynamic fixed effect were employed in achieving the objective. Major findings from this study show that financial development strategy targeted at increasing the ratio of broad money to GDP does not increase the agricultural output growth rate for both WAMZ and BRICS member countries. The adverse effect of expanding broad money in WAMZ is worse for member countries that already have low agricultural output growth trajectory. Also, enhancing financial development through increases in credit to the private sector enhances the agricultural output growth rate in BRICS but not in WAMZ; the impact is stronger for BRICS member countries that have high agricultural output growth. Trade globalisation does not enhance the agricultural growth rate of BRICS member countries, but it does for WAMZ member countries. Trade globalisation improves WAMZ member countries that has low agricultural output growth. Comparatively, the study found that financial development and trade globalisation have higher and better impact on the agricultural productivity of BRICS economy than that of WAMZ. The study recommends that the West African Monetary Zone member countries must develop policies that ensure greater mobilisation of credit to the real sector just like the BRICS member countries. WAMZ must take the advantage of the African Continental Free Trade Area (AfCFTA) agreement to see how they can expand trade globalisation and export their agricultural products.

Keywords: Financial development; Trade globalisation; Agricultural output; BRICS; WAMZ (search for similar items in EconPapers)
JEL-codes: E50 F13 Q14 (search for similar items in EconPapers)
Date: 2022
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DOI: 10.1007/s43546-022-00271-w

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