Determining the role of agriculture towards urbanization: testing the hypothesis

Abstract

The current study has examined the role of agriculture in urbanization. The study used time series data from 1983-2017. The order of integration of data suggested the estimation of an autoregressive distributed lag model for analysis. The study also used (Bayer and Hanck, 2012) combine cointegration to check the consistency of the cointegration relationship between agriculture growth and urbanization in the presence of other regressors. The empirical results showed that growth in the agriculture sector decreased urbanization. Whereas, problematic urbanization can be controlled through the development of the agriculture sector of the economy. The government can improve the agriculture sector by providing incentives to the farming community in the selected potential areas of agriculture, Like value addition and livestock. Improvement of the agricultural financial system of Pakistan can play a significant role.