Energy Consumption and Agriculture Sector in Middle Income Developing Countries : A Panel Data Analysis

The importance of energy consumption in agriculture sector may never be ignored in developing countries. Keeping in view, the present study is aimed at analyzing the influence of energy consumption on agriculture sector of middle income developing countries. Following Solow growth model, the study considers panel data of middle income developing countries for the period from 1990 to 2014. All variables are estimated in US dollars calculated at year 2005 prices and log – log form of the equation is utilized for examining elasticity of agriculture sector with respect to energy consumption. Using Levin, Lin and Chu – unit root test, it is observed that variables are having mixed order of integration I (0) and I (1). In this situation, Panel ARDL technique is thought to be the most appropriate for econometric analysis. Panel ARDL Long run results exhibit that real agriculture sector output is enhanced due to energy consumption, GDP deflator, real government expenditure and real broad money while total labor force and real gross fixed capital formation is having inverse influence on real agriculture sector output in the long run. It is suggested that energy conservation policies should not be adopted by the middle income developing countries for acceleration of agriculture sector