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The evolving role of agricultural technology indicators and economic growth in rural poverty: has the ideas machine broken down?

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Abstract

The objective of the study is to examine the impact of technical progress in agriculture on changes in rural poverty in Pakistan by using annual data from 1975–2011. Data is analyzed by the set of sophisticated econometric techniques i.e., cointegration theory, Granger causality test and variance decomposition, etc. The results reveal that agricultural technology indicators act as an important driver to alleviate rural poverty in Pakistan. Granger causality test indicate that causality runs from technological indicators to rural poverty but not vice versa. However, agricultural irrigated land and industry value added, both does not Granger cause rural poverty, which holds neutrality hypothesis between the variables. Variance decomposition analysis shows that among all the technological indicators, agricultural machinery in form of tractors have exerts the largest contribution to changes in rural poverty in Pakistan. The study concludes that agricultural technology indicators are closely associated with economic growth and rural poverty in Pakistan. Technology in Pakistan has a low pace but still old technology continuously contributed towards poverty reduction. The question whether idea machine is broken down or not? Still need further exploration.

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Notes

  1. If the series are integrated with the mixture of order of integration i.e., I(0) and I(1), it implies bonds testing approach which was proposed by Pesaran et al. (2001).

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Authors and Affiliations

  1. Department of Economics, University of Haripur, Khyber Pakhtunkhwa, Pakistan

    Muhammad Azhar Khan

  2. Islamia University of Bahawalpur, Bahawalpur, Pakistan

    Muhammad Zahir Khan

  3. Department of Management Sciences, COMSATS Institute of Information Technology, Abbottabad, Pakistan

    Khalid Zaman

  4. Department of Humanities, COMSATS Institute of Information Technology, Abbottabad, Pakistan

    Muhammad Mushtaq Khan

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  1. Muhammad Azhar Khan
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  2. Muhammad Zahir Khan
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  3. Khalid Zaman
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Correspondence to Khalid Zaman.

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Khan, M.A., Khan, M.Z., Zaman, K. et al. The evolving role of agricultural technology indicators and economic growth in rural poverty: has the ideas machine broken down?. Qual Quant 48, 2007–2022 (2014). https://doi.org/10.1007/s11135-013-9877-6

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