Financial Development And Agricultural Production In The WAEMU Area

The objective of this research paper is to examine the existence of a non-linear relationship between financial development and agricultural production in the WAEMU region by considering different indicators of financial development. We then construct a PSTR model, our basic model. As a robustness test, we formulate a quadratic model that takes into account the endogeneity of some explanatory variables. The results of the empirical tests and estimates reveal a decreasing linear relationship between domestic credit provided by the banking sector and agricultural production. With respect to the stock market, the results obtained show a non-linear relationship between the development of the stock market and agricultural production. The effect of stock market capitalization on agricultural production is favorable but decreasing.