An Analysis of long – run relationship between agricultural exports and economic growth in Thailand

Abstract

This study aims to analyze the relationship between agricultural exports and Thailand's economic growth in the long run, focusing on the value of the top 5 agricultural export commodities: 1. fresh, frozen, and dried fruit, 2. rice, 3. rubber, 4. tapioca products, 5. prepared poultry and real agricultural GDP in Thailand using quarterly time series data from Q1/2001 to Q4/2019. There are two primary purposes of this study. First, it aims to analyze the relationship between agricultural exports and the economic growth in Thailand with a dynamic cointegration test. Second, to compare the impacts of each of the top 5 agricultural product exports that impact Thailand's economic growth in the long run. The result illustrates the long-run relationship between agricultural product exports and Thailand's economic growth with both positive and negative impacts of the top 5 agricultural product export on Thailand's economic growth. It is observed that the negative but not significant impact of exporting 1. fresh, frozen, and dried fruit, 2. rice, and 3. rubber. On the other hand, the result shows a positive and significant impact on tapioca products export and prepared poultry export. Also, from the lag variable of real agricultural GDP, the result shows that the real agricultural GDP in quarter 2 and quarter 3 have a negative and significant impact on the present quarter's economic growth. In addition, there is a short-run relationship between agricultural product exports and Thailand's economic growth. For comparing the impact of each of the top 5 products exported on economic growth, the result finds the long-run relationship between the top 5 products exported and economic growth. The finding of study shows that the export of prepared poultry has the most positive and significant impact on economic growth in the long run among the top 5 agricultural products exported. On the other hand, rice exports have the most negative and significant impact on economic growth in the long run among the top 5 agricultural products exported. As a result, the government should regulate trade policies to support agriculture and control the quality of agricultural products to meet the market's quality and quantity requirements and find a new market to expand Thailand's agricultural export value.