EXAMINING THE CONTRIBUTION OF AGRICULTURAL SUB-SECTORS TO AGRICULTURAL GDP IN THE ASEAN COUNTRIES USING A PANEL DATA APPROACH

Using a panel data framework, this study looks at the changing relationship between agriculture production and four major agricultural sub-sectoral outputs in seven Association of Southeast Asian Nations (ASEAN) countries from 1961 to 2016. The data was obtained from the Food and Agriculture Organization (FAO) of the United Nations dataset. It uses panel unit root tests and panel co-integration analysis to figure out how the variables are related. In addition, the long-run co-integration coefficient parameters are estimated to detect the existence of long-run relationships to measure the effect of responses between agricultural GDP and four major agricultural sub-sectoral outputs. Most of the panel unit root results show that there is a long-run co-integrating relationship among the variables. So, there is a possible long-run co-integrating relation among the variables. The empirical results of panel co-integration analysis revealed that the long-run equilibrium relationship among the variables is not positive but statistically significant, indicating the existence of long-run co-movement among the variables. The long-run equilibrium results support the idea that agriculture production is fully dependent on the sub-sectors. In addition, among all the sub-sectors, the cereals sub-sector shows poor results, which indicates a comparatively lower contribution to agriculture production. The food sub-sector shows the most significant results in all seven ASEAN countries, which indicates that the contribution of the food sub-sector is very high compared to other sub-sectors.