The Japanese Journal of Rural Economics
Online ISSN : 2189-5880
Print ISSN : 2187-946X
ISSN-L : 2187-946X
Article
Causality between Capital Investment and Productivity in Japanese Agriculture, 1957-97
A B Md RahmatullahYoshimi Kuroda
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JOURNAL FREE ACCESS

2005 Volume 7 Pages 78-87

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Abstract
This study examines the causality between total factor productivity (TFP) and capital investment in Japanese agriculture for the period 1957-97. We employ the Granger causality test to determine the causality between the two variables. This study also investigates movements in total output, total input and TFP for average farms of four size classes for the same period. We employ the aggregation technique to estimate total output and total input and use a large pooled cross-section and time series data set. It has been found that both TFP and capital investment had a fairly high growth rate from the mid 1950s to the early 1970s, and thereafter it started declining. The result of this study shows that there is a significant and positive bi-directional Granger-causal relationship between TFP and capital investment in Japanese agriculture over the long term.
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© 2005 The Agricultural Economics Society of Japan
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