Malaysia’s Agricultural Production Dropped and the Impact of Climate Change: Applying and Extending the Theory of Cobb Douglas Production

Under climate change, Malaysia's agricultural production showed decreasing in recent decades. This study tries to fill in the gaps to applying and extending the Cobb Douglas production function theory to examine the impact of climate change and economic factors on Malaysia's agricultural p...

Descripción completa

Guardado en:

Detalles Bibliográficos
Autores principales:	Ahmad Fawad Entezari, Kelly Kai Seng Wong, Fazlin Ali
Formato:	article
Lenguaje:	EN
Publicado:	Universitas Muhammadiyah Yogyakarta 2021
Materias:	agriculture, climate change, global warming, economics, co-integration Agriculture S Agriculture (General) S1-972 Business HF5001-6182
Acceso en línea:	https://doaj.org/article/8783a93c61654e2c87b2957c5488f860
Etiquetas:	Agregar Etiqueta Sin Etiquetas, Sea el primero en etiquetar este registro!

id	oai:doaj.org-article:8783a93c61654e2c87b2957c5488f860
record_format	dspace
spelling	oai:doaj.org-article:8783a93c61654e2c87b2957c5488f8602021-11-22T08:03:56ZMalaysia’s Agricultural Production Dropped and the Impact of Climate Change: Applying and Extending the Theory of Cobb Douglas Production2407-814X2527-923810.18196/agraris.v7i2.11274https://doaj.org/article/8783a93c61654e2c87b2957c5488f8602021-07-01T00:00:00Zhttps://journal.umy.ac.id/index.php/ag/article/view/11274https://doaj.org/toc/2407-814Xhttps://doaj.org/toc/2527-9238Under climate change, Malaysia's agricultural production showed decreasing in recent decades. This study tries to fill in the gaps to applying and extending the Cobb Douglas production function theory to examine the impact of climate change and economic factors on Malaysia's agricultural production. Using Engle-Granger (EG) test with 37 years of data from 1980 to 2016. The findings showed that the long-run estimated coefficients for rainfall, temperature, and interest rate were -0.338, -0.024, and -0.029, respectively. This indicates that each additional percent in rainfall, temperature, and interest rate will be affected the agricultural production, on average, to decrease by 0.338%, 0.024%, and 0.029%, respectively, holding others constant. Besides that, the long-run elasticity of real GDP per capita, employment, and Trend showed 0.509, 0.513, and 0.119, respectively. Increase 1% of real GDP per capita will lead to the agricultural production to increase about 0.509%, ceteris paribus. The elasticity of employment showed that each 10% increase in agricultural employment will increase the agricultural production on average 5.13%, ceteris paribus. Furthermore, the trend estimated coefficient showed that the agricultural production will have a constant growth rate which is 0.119% per year. All variables were statistically significant to explain the long-run agricultural production. The short-run rainfall, temperature, employment, and Trend were statistically significant to determine the short-run production growth. Therefore, advanced technology and the latest information on climate change are relevant to boost agricultural production growth. In addition, policymakers also suggested establishing lower interest rate loan facilities and no labor shortage in this industry.Ahmad Fawad EntezariKelly Kai Seng WongFazlin AliUniversitas Muhammadiyah Yogyakartaarticleagriculture, climate change, global warming, economics, co-integrationAgricultureSAgriculture (General)S1-972BusinessHF5001-6182ENAgraris: Journal of Agribusiness and Rural Development Research, Vol 7, Iss 2, Pp 127-141 (2021)
institution	DOAJ
collection	DOAJ
language	EN
topic	agriculture, climate change, global warming, economics, co-integration Agriculture S Agriculture (General) S1-972 Business HF5001-6182
spellingShingle	agriculture, climate change, global warming, economics, co-integration Agriculture S Agriculture (General) S1-972 Business HF5001-6182 Ahmad Fawad Entezari Kelly Kai Seng Wong Fazlin Ali Malaysia’s Agricultural Production Dropped and the Impact of Climate Change: Applying and Extending the Theory of Cobb Douglas Production
description	Under climate change, Malaysia's agricultural production showed decreasing in recent decades. This study tries to fill in the gaps to applying and extending the Cobb Douglas production function theory to examine the impact of climate change and economic factors on Malaysia's agricultural production. Using Engle-Granger (EG) test with 37 years of data from 1980 to 2016. The findings showed that the long-run estimated coefficients for rainfall, temperature, and interest rate were -0.338, -0.024, and -0.029, respectively. This indicates that each additional percent in rainfall, temperature, and interest rate will be affected the agricultural production, on average, to decrease by 0.338%, 0.024%, and 0.029%, respectively, holding others constant. Besides that, the long-run elasticity of real GDP per capita, employment, and Trend showed 0.509, 0.513, and 0.119, respectively. Increase 1% of real GDP per capita will lead to the agricultural production to increase about 0.509%, ceteris paribus. The elasticity of employment showed that each 10% increase in agricultural employment will increase the agricultural production on average 5.13%, ceteris paribus. Furthermore, the trend estimated coefficient showed that the agricultural production will have a constant growth rate which is 0.119% per year. All variables were statistically significant to explain the long-run agricultural production. The short-run rainfall, temperature, employment, and Trend were statistically significant to determine the short-run production growth. Therefore, advanced technology and the latest information on climate change are relevant to boost agricultural production growth. In addition, policymakers also suggested establishing lower interest rate loan facilities and no labor shortage in this industry.
format	article
author	Ahmad Fawad Entezari Kelly Kai Seng Wong Fazlin Ali
author_facet	Ahmad Fawad Entezari Kelly Kai Seng Wong Fazlin Ali
author_sort	Ahmad Fawad Entezari
title	Malaysia’s Agricultural Production Dropped and the Impact of Climate Change: Applying and Extending the Theory of Cobb Douglas Production
title_short	Malaysia’s Agricultural Production Dropped and the Impact of Climate Change: Applying and Extending the Theory of Cobb Douglas Production
title_full	Malaysia’s Agricultural Production Dropped and the Impact of Climate Change: Applying and Extending the Theory of Cobb Douglas Production
title_fullStr	Malaysia’s Agricultural Production Dropped and the Impact of Climate Change: Applying and Extending the Theory of Cobb Douglas Production
title_full_unstemmed	Malaysia’s Agricultural Production Dropped and the Impact of Climate Change: Applying and Extending the Theory of Cobb Douglas Production
title_sort	malaysia’s agricultural production dropped and the impact of climate change: applying and extending the theory of cobb douglas production
publisher	Universitas Muhammadiyah Yogyakarta
publishDate	2021
url	https://doaj.org/article/8783a93c61654e2c87b2957c5488f860
work_keys_str_mv	AT ahmadfawadentezari malaysiasagriculturalproductiondroppedandtheimpactofclimatechangeapplyingandextendingthetheoryofcobbdouglasproduction AT kellykaisengwong malaysiasagriculturalproductiondroppedandtheimpactofclimatechangeapplyingandextendingthetheoryofcobbdouglasproduction AT fazlinali malaysiasagriculturalproductiondroppedandtheimpactofclimatechangeapplyingandextendingthetheoryofcobbdouglasproduction
_version_	1718417807523184640

Malaysia’s Agricultural Production Dropped and the Impact of Climate Change: Applying and Extending the Theory of Cobb Douglas Production

Ejemplares similares