Tripartite relationship among Agricultural Domestic Product, Agricultural Investment, and Public Spending: An applicative study in Libya using the VECM causality method

Abstract

This research investigates the tripartite relationship among investment, public expending, and agricultural GDP in Libya. A VECM model was utilized for time series data from 1980 to 2023. The findings showed that the stationarity at the first difference and there is cointegration among study variables. It also emphasized the appearance of a long-run relationship moving from Agricultural domestic product and public expending towards agricultural investment, and Agricultural domestic product and agricultural investment towards public expending. On another note, the three varaibles have no causal relationship in short-run. The research is recommends increasing the effectiveness of investments in stimulating Agricultural domestic product by directing agricultural investments towards projects with high feasibility and high financial returns that rely on technology to increase productivity, in addition to developing research related to developing varieties and strains suitable for the local environment and training for workers in the field of agricultural production.