FINANCIAL DEEPENING AND AGRICULTURAL LABOUR PRODUCTIVITY IN ECOWAS: A THRESHOLD ANALYSIS

Abstract

This study examines the threshold effect of financial deepening on agricultural labour productivity using a panel of 15 Economic Community of West African States (ECOWAS). We adopt a battery of econometric models including the Hansen threshold model and a polynomial model within a Feasible Generalised Least Square (FGLS) setting. The results reveal that there exists no threshold effect of financial deepening on agricultural labour productivity. Results further show that financial deepening is not a significant driver of agricultural labour productivity in ECOWAS but life expectancy at birth and agricultural gross fixed capital formation per worker are significant drivers. This implies that financial depth is not a potent strategy in boosting agricultural labour productivity. As a result, paying attention to the significant determinants is rather recommended.