IDEAS home Printed from https://ideas.repec.org/a/spr/endesu/v26y2024i11d10.1007_s10668-023-03847-0.html
   My bibliography  Save this article

Estimating the contribution of Saudi agricultural development fund to GDP and economic growth

Author

Listed:
  • Yosef A. Alamri

    (King Saud University)

  • Adel M. Ghanem

    (King Saud University)

  • Mohamad A. Alnafissa

    (King Saud University)

Abstract

Given the need of the Agricultural Development Fund to measure its contribution in a quantitative manner to agricultural and economic development, this research was aimed to estimate the relative importance of the contribution of Agricultural Development Fund on agricultural output, gross domestic product and economic growth rate of Saudi Arabia during the period 1990–2019, using econometric analysis and binomial probability distribution. The study showed the instability of both agricultural loans and economic growth rate during the study period, where the coefficient of variation reached 120.5% and 133.3% for each, respectively. The Agricultural Development Fund plays a significant role in the Saudi economy, as its contribution to agricultural output ranged between a minimum of 1.8% and a maximum of 27.0% at a 95% confidence level. The upper limit of the Agricultural Development Fund’s contribution on GDP was 2.81% at a confidence level of 95%. The upper limit of the Agricultural Development Fund’s contribution on economic growth rate was 0.115% at a confidence level of 95% during the study period. As for the contribution of the agricultural sector on the economic growth rate, it reached a maximum of 0.381% at a confidence level of 95% during the period 1990–2019. Finally, this study recommends the need for the Agricultural Development Fund to reconsider the lending policy so that it does not depend only on collection rates, in addition to preparing a study on local agricultural investment, so that it can take advantage of the relative characteristics of the productive areas and choose projects characterized by a high internal rate of return and its ability to raise Standard of living for the largest number of people. Increasing the lending rates to expand the number of productive projects to be established or expanding existing projects to increase the value added in the Saudi economy and then increase the contribution of the Agricultural Development Fund to the gross domestic product.

Suggested Citation

  • Yosef A. Alamri & Adel M. Ghanem & Mohamad A. Alnafissa, 2024. "Estimating the contribution of Saudi agricultural development fund to GDP and economic growth," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 26(11), pages 28877-28891, November.
    • Handle: RePEc:spr:endesu:v:26:y:2024:i:11:d:10.1007_s10668-023-03847-0
    DOI: 10.1007/s10668-023-03847-0
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s10668-023-03847-0
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s10668-023-03847-0?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Ebere Chidinma Edith & Oresanwo Adeniyi Marcus & Omogboye Michael Abayomi & Timothy Ayomitunde Aderemi, 2021. "Would Agricultural Credit Sustain Agricultural Output in Nigeria? An Empirical Perspective," The Journal of Accounting and Management, Danubius University of Galati, issue 3(11), pages 76-83, December.
    2. Philippe Aghion & Thibault Fally & Stefano Scarpetta, 2007. "Credit constraints as a barrier to the entry and post-entry growth of firms [‘Dualism and macroeconomic volatility’]," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 22(52), pages 732-779.
    3. Erik Canton & Isabel Grilo & Josefa Monteagudo & Peter Zwan, 2013. "Perceived credit constraints in the European Union," Small Business Economics, Springer, vol. 41(3), pages 701-715, October.
    4. Meghana Ayyagari & Asli Demirgüç-Kunt & Vojislav Maksimovic, 2008. "How Important Are Financing Constraints? The Role of Finance in the Business Environment," The World Bank Economic Review, World Bank, vol. 22(3), pages 483-516, November.
    5. Beck, Thorsten & Demirgüç-Kunt, Asli & Maksimovic, Vojislav, 2008. "Financing patterns around the world: Are small firms different?," Journal of Financial Economics, Elsevier, vol. 89(3), pages 467-487, September.
    6. Harvey, David I. & Leybourne, Stephen J. & Taylor, A.M. Robert, 2013. "Testing for unit roots in the possible presence of multiple trend breaks using minimum Dickey–Fuller statistics," Journal of Econometrics, Elsevier, vol. 177(2), pages 265-284.
    7. repec:oup:ecpoli:v:22:y:2007:i::p:731-779 is not listed on IDEAS
    8. Johansen, Søren & Juselius, Katarina, 1992. "Testing structural hypotheses in a multivariate cointegration analysis of the PPP and the UIP for UK," Journal of Econometrics, Elsevier, vol. 53(1-3), pages 211-244.
    9. Abbasi, Kashif Raza & Shahbaz, Muhammad & Jiao, Zhilun & Tufail, Muhammad, 2021. "How energy consumption, industrial growth, urbanization, and CO2 emissions affect economic growth in Pakistan? A novel dynamic ARDL simulations approach," Energy, Elsevier, vol. 221(C).
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Léon, Florian, 2020. "The provision of long-term credit and firm growth in developing countries," Economic Modelling, Elsevier, vol. 90(C), pages 66-78.
    2. Ruchi Gupta & Bhanu Pratap Singh, 2024. "Does Access to Finance and Investment Climate Enhance Small and Medium Enterprises (SMEs) Innovation in India?," SN Operations Research Forum, Springer, vol. 5(4), pages 1-29, December.
    3. Asma Kanwal & Nwakego Eyisi, 2023. "Income Inequality and Frontend Innovation: Evidence from Frontier Markets," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 14(1), pages 255-286, March.
    4. Nwakego Eyisi & Hyacinth E. Ichoku & Asma Kanwal, 2024. "Front-end Innovation and Top Income Inequality: Evidence from Emerging Markets," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(1), pages 1437-1481, March.
    5. Carsten Eckel & Florian Unger, 2023. "Credit Constraints, Endogenous Innovations, And Price Setting In International Trade," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 64(4), pages 1715-1747, November.
    6. Ullah, Barkat, 2021. "Does innovation explain the performance gap between privatized and private firms?," Journal of Economics and Business, Elsevier, vol. 113(C).
    7. Francesco Quatraro & Marco Vivarelli, 2015. "Drivers of Entrepreneurship and Post-entry Performance of Newborn Firms in Developing Countries," The World Bank Research Observer, World Bank, vol. 30(2), pages 277-305.
    8. Andrés Rodríguez‐Pose & Roberto Ganau & Kristina Maslauskaite & Monica Brezzi, 2021. "Credit constraints, labor productivity, and the role of regional institutions: Evidence from manufacturing firms in Europe," Journal of Regional Science, Wiley Blackwell, vol. 61(2), pages 299-328, March.
    9. Maria Luisa Mancusi & Andrea Vezzulli, 2014. "R&D AND CREDIT RATIONING IN SMEs," Economic Inquiry, Western Economic Association International, vol. 52(3), pages 1153-1172, July.
    10. Thang Bach & Charles Harvie & Thanh Le, 2021. "How credit constraints affect small and medium enterprises' strategic employment decisions and employees' labour outcomes: Evidence from Vietnam1," Economics of Transition and Institutional Change, John Wiley & Sons, vol. 29(2), pages 319-341, April.
    11. Pietrovito, Filomena & Rancan, Michela, 2024. "Credit rationing and sustainable activities: A firm-level investigation," International Review of Economics & Finance, Elsevier, vol. 94(C).
    12. Mendoza, Ronald U. & Canare, Tristan A. & Ang, Alvin, 2015. "Doing Business: A Review of Literature and Its Role in APEC 2015," Research Paper Series DP 2015-37, Philippine Institute for Development Studies.
    13. Erik Canton & Isabel Grilo & Josefa Monteagudo & Peter Zwan, 2013. "Perceived credit constraints in the European Union," Small Business Economics, Springer, vol. 41(3), pages 701-715, October.
    14. Peter Egger & Christian Keuschnigg, 2015. "Innovation, Trade, and Finance," American Economic Journal: Microeconomics, American Economic Association, vol. 7(2), pages 121-157, May.
    15. Harrison, Richard & Li, Youwei & Vigne, Samuel A. & Wu, Yuliang, 2022. "Why do small businesses have difficulty in accessing bank financing?," International Review of Financial Analysis, Elsevier, vol. 84(C).
    16. Victor Motta, 2017. "Are SMEs in the hospitality industry less likely to experience credit constraint than other industries in the service sector? Evidence from Latin America," Tourism Economics, , vol. 23(7), pages 1398-1418, November.
    17. Kale, Deeksha, 2016. "The Impact of Directed Lending Programs on the Credit Access of Small Businesses in India: A Firm-level Study," MPRA Paper 72510, University Library of Munich, Germany.
    18. Till Gross & Stephane Verani, 2012. "Financing Constraints, Firm Dynamics, and International Trade," 2012 Meeting Papers 1035, Society for Economic Dynamics.
    19. Fu, Jiangtao & Shimamoto, Daichi & Todo, Yasuyuki, 2017. "Can firms with political connections borrow more than those without? Evidence from firm-level data for Indonesia," Journal of Asian Economics, Elsevier, vol. 52(C), pages 45-55.
    20. Arráiz,Irani & Bruhn,Miriam & Stucchi,Rodolfo Mario, 2015. "Psychometrics as a tool to improve screening and access to credit," Policy Research Working Paper Series 7506, The World Bank.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:endesu:v:26:y:2024:i:11:d:10.1007_s10668-023-03847-0. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.