The relationship between oil revenues and the value-added of the agricultural sector

Abstract

The present study investigates the effects of oil revenues on the value-added of the agricultural sector and the growth of their value-added. The results of the augmented Dickey-Fuller and Phillips-Perron tests indicate that the variables of the value-added growth of the agricultural sector are stationary and the variable of the ratio of consumption expenditures to value-added of the agricultural sector is also stationary in the first-order difference. Hence, given the stationarity of some variables and the non-stationarity of others, the Autoregressive Distributed Lag model was estimated to investigate the relationship between them in each of the studied sectors. In this model, the growth rate of the value-added in this sector is considered a dependent variable, and capital growth in the sector, the ratio of government expenditures to the value-added in this sector, oil revenues, and inflation rate are considered explanatory variables. The results revealed that the growth of oil revenues has no impact on the value-added of the agricultural sector.