Fertilizer Application and Agricultural Growth in Rural China: Co-integration Estimation and Granger Causality Test

Owusu Samuel Mensah, Ji You Jun, Qiao Hu, Fu Chuanbo

Abstract


Application of Chemical fertilizer contributes significantly to the production of food and agricultural growth worldwide. This paper estimates the short and long-run effects of fertilizer consumption and agricultural growth by adopting unit root tests and co-integration. The study investigates the effect of fertilizer consumption on agricultural growth by using Fully Modified OLS and Dynamics OLS time series data from 1987 to 2015. The findings indicate the existence of a long-run relationship between the increase in fertilizer application and agricultural growth in PR China. Moreover, there is the presence of long-run causality from fertilizer consumption to the agricultural growth.   The empirical findings of FMOLS and DOLS revealed that increase in fertilizer application has a positive and significant effect on the growth of Chinese agriculture. The findings of this study will help to contribute to the current food production challenges and effective application of chemical fertilizer to boost food production. 

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