The Nonlinear Relationship between Bank Credits and Agricultural Employment in Mazandaran Province

Subject Areas : Environmental policy and management

Alireza  Keikha ¹ (Lecturer, University of Zabol.)
Farshid  Alipour ² (Young Researchers and Elites Club, Babol Branch, Islamic Azad University, Babol, Iran.)
Hamid  Mohammadi ³ (Assistant Professor, University of Zabol.)

Received: 2013-11-24 Accepted : 2014-05-15 Published : 2014-12-01

Keywords: Bank credit, Agriculture Sector employment, Threshold error correction model,

Abstract :

Mazandaran province is one of the most important agricultural areas in Iran. Researches findings show that the role of bank credits is really important due to the lack of available funds in agricultural sector. In this study, the relationship between allocation of Agricultural Bank credits of Iran as professional bank section and agricultural employment was studied in the Mazandaran province based on a threshold error correction model during 1981-2011. The results show that the impact of credits on agricultural employment has been significantly different in upper and lower level of estimated threshold. The estimated threshold is about 44 percent for bank credits. The impact of bank credits on agricultural employment will be significantly negative when they exceeds from the threshold point. The results confirm transfer of capital from agriculture to other sections, resulting in a lack of integrated management for credit allocation system.

References:

1- Bruce, E. (1997). Inference in TAR models. Nonlinear Dynamics and Econometrics, 1, 119-131.

2- ESSAP. (1996). Showing the way, metrologies for successful rural poverty alleviation projects, Bangkok, pp 2-3.

3- Gershon, feder, & Lawrence, J. (1990). The relationship between credit and productivity in Chinese agriculture. A microeconomic model of disequilibrium. American Journal of Agricultural Economics.72(5), 1151-1157. [DOI via Crossref]

4- Izhar, A., & Tariq, M. (2009). Impact of institutional credit on aggregate agricultural production in India during post reform period.

5- Meyer, R. L. (1990). Analyzing the farm-level impact of agricultural credit: discussion. American Journal of Agricultural Economics, 72(5), 1158-1160. [DOI via Crossref]

6- Carter, M. R., & Wiebe, K. D. (1990). Access to capital and its impact on agrarian structure and productivity in Kenya. American Journal of Agricultural Economics, 1146-1150. [DOI via Crossref]

7- Mong Naranjo, A., & Hall, L.J. (2003). Access to credit constraints on Costa Rican manufacturing firms. Journal of Financial Economics, 34, 187-221.

8- Rogg, C. S. (2000). The Impact of access to credit on the saving behavior of micro-entrepreneurs: evidence from three Latin American Countries. A paper on a Thesis submitted to the University of Oxford.

9- Senanayake, S.M. (2002). Which have more access to cheap credit in Vietnam? India Journal of Agricultural Economic, 57, 241-246.