ANALYSIS OF TOTAL FACTOR PRODUCTIVITY IN THE EGYPTIAN AGRICULTURE, WITH EMPHASIS ON ITS MULTI-SECTORAL DETERMINANTS

Abstract

This study was conducted for providing an up to date calculation of Agricultural Total Factor Productivity (TFP) in Egypt during the period 1961-2014 using the TornqVist Thiel approach. The included agricultural inputs were: agricultural labor, machinery, seeds, pesticides, capital stock, animal feed including green and concentrated fodder, fertilizers, and natural resources. In addition to figuring out the sources of growth in the agricultural TFP (Total Factor Productivity) in Egypt. Depending on the multi-sectoral development indicators published in the World Bank about Egypt. This was achieved through: first, illustrating the correlation between the TFP and the groups of development indicators; using the correlation coefficient matrix. Second, selecting the highly correlated indicators with the TFP and conducting multiple regressions. The indicators were divided into 3 groups according to data availability; 54 years (1961-2014), 44 years (1971-2014), and 25 years (1990-2014). As for the 54-year-analysis, the relationship among the TFP in the Egyptian agricultural sector and each of Gross Domestic Saving (GDS), and official exchange rate (OER) is positive and statistically significant. But, the relationship between the TFP and the Agri-row-material exports (ARMEX) is negative and statistically insignificant. As for the 44-year-analysis, the relationship among the TFP and each of net official development assistance (NODA), electric power consumption (EPC), and imports of goods and services (IMGS) were positive and statistically significant. But, the relationship between the TFP and the fossil fuel energy consumption (FFEC) is negative and statistically insignificant. As for the 25-year-analysis, the relationship among the TFP and each of Research and Development (RD), Rail lines (RL), and foreign direct investment inflows (FDII) were positive and statistically significant. But, the relationship between the TFP and the taxes on exports (TOEX) is negative and statistically significant.