Journal of Agricultural Economics and Development Vol. 3(9), pp. 144-151, November 2014 ISSN 2327-3151 ©2014 Academe Research Journals

Full Length Research Paper

Trade liberalization effects on agricultural production growth: The case of Sri Lanka

Nirodha De Silva¹*, Jaime Malaga¹ and Jeff Johnson²

¹Department of Agricultural and Applied Economics, Texas Tech University, Lubbock, TX, USA.

²Delta Research and Extension Center, Mississippi State University, MS, USA.

*Corresponding author. E-mail: k-v-nirodha-sudershini.de-silva@ttu.edu;  nirodhakam@yahoo.com. Tel: 806-742-2821 ext:229.

JEL Classifications: Q17, Q18.

Accepted 30 October, 2014

Abstract

This paper provides a quantitative assessment of the trade policy impacts on agricultural sector growth in Sri Lanka based on the national data from 1960 to 2010. A number of multiple regression models incorporating macro level data were estimated using the Ordinary Least Square (OLS) method to investigate the impact of trade policy reforms on agricultural sector growth in Sri Lanka. The empirical results suggested that trade liberalization had a positive effect on agricultural production growth, and eventually lead to improved agricultural productivity in Sri Lanka. This analysis also concluded that the trade openness, investment, and interest rate were significant factors that were positively related to agricultural production growth.

Key words: Agricultural production growth, economic growth, investments, trade liberalization, trade openness, Sri Lanka.