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The impact of banking and external sectors on Mexican agriculture in the period 1995-2015

Author

Listed:
  • Guillermo BENAVIDES-PERALES

    (Tecnológico de Monterrey, EGADE Business School, Mexico City, Mexico)

  • Isela Elizabeth TELLEZ-LEON

    (Instituto Politécnico Nacional, Escuela Superior de Economía, Mexico City, Mexico)

  • Francisco VENEGAS-MARTINEZ

    (Instituto Politécnico Nacional, Escuela Superior de Economía, Mexico City, Mexico)

Abstract

Mexican agricultural production has been characterised by a lack of dynamism in recent years and is losing ground in terms of GDP. This may reflect the lack of funding from commercial and development banks. This research aims at studying the dynamics of the agriculture sector through econometric analysis using Vector Autoregressive (VAR) and Vector Error Correction (VEC) models in order to examine the short- and long-run relationships among agricultural production, terms of trade (ratio of agricultural prices and general price level), agricultural exports and lending from commercial and development banks. The main empirical findings, contrary to what was expected, is that even though there was a precarious level of funding from the banking sector, credit from commercial banking was higher than that from development banking in the last decades. Further, relative prices were found to have a negative relationship with agricultural exports, showing the importance of the external sector in agriculture.

Suggested Citation

  • Guillermo BENAVIDES-PERALES & Isela Elizabeth TELLEZ-LEON & Francisco VENEGAS-MARTINEZ, 2018. "The impact of banking and external sectors on Mexican agriculture in the period 1995-2015," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 64(1), pages 36-49.
    • Handle: RePEc:caa:jnlage:v:64:y:2018:i:1:id:193-2016-agricecon
    DOI: 10.17221/193/2016-AGRICECON
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    References listed on IDEAS

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    1. Jorge Fernandez-Cornejo & C. Richard Shumway, 1997. "Research and Productivity in Mexican Agriculture," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(3), pages 738-753.
    2. Alexandre Vera-Cruz & Gabriela Dutrenit & Griselda Martinez & Arturo Torres-Vargas & Javier Ekboir, 2008. "Virtues and limits of competitive funds to finance research and innovation: The case of Mexican agriculture," Science and Public Policy, Oxford University Press, vol. 35(7), pages 501-513, August.
    3. Donald K. Freebairn, 1969. "The Dichotomy of Prosperity and Poverty in Mexican Agriculture," Land Economics, University of Wisconsin Press, vol. 45(1), pages 31-42.
    4. Antonio Yunez-Naude & Fernando Barceinas Paredes, 2004. "The Agriculture of Mexico After Ten Years of Nafta Implementation," Working Papers Central Bank of Chile 277, Central Bank of Chile.
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