Government Ownership of Banks: Diversifying of Potential Products and Factors to Subsidize Agriculture

Abstract

It has recently been shown that government ownership of banks has a significant role in addressing market failures, improving social welfare and economic development. This study explores and identifies the potential products and factors in agriculture that public banks should subsidize. In this paper, the author investigates statistical properties of the two-step generalized method of moments (GMM) estimator to analyze the direct and indirect consumption of inputs in agricultural production on national-level data for 32 crop products and 14 livestock products from Cambodia during the 1989–2018 period. Many specifications have statistical significance and negative competent production growth. These results suggest that the proposed subsidies should clearly define the types of specialty products by local producers and their potential markets, both local and international. This paper investigates some policy options for government ownership of banks to improve agriculture. However, it must also adapt to new climate change and emergency events for the long-run sustainable development of the sector. Future directions should consider studying micro-data for specific types of products and regions.