<abstract xmlns="http://www.w3.org/1999/xhtml">
<p>The aim of the study was to investigate the relationship between the informal economy and agricultural productivity in Bangladesh over a 25-year period from 1993 to 2018. While the impact of the black market on the economy is a well-studied topic, its implications for the agricultural sector in this specific country context was less explored. By controlling structural transformation, trade, and foreign direct investment (FDI) in agriculture, the authors employ autoregressive distributed lag (ARDL) using Kripfganz and Schneider’s (2018) approximations, as well as fully modified ordinary least square (FMOLS) and feasible generalized least square (FGLS) techniques. The results reveal that informality initially hampers agricultural productivity in the short term due to reduced government revenue, but in the long run, it acts as an active social protection system, fostering informal employment and providing essential amenities. Although the study’s time span limits the investigation to this specific period, it serves as a crucial attempt to assess the impact of informality on agriculture in Bangladesh, highlighting the need for cautious consideration of both the benefits and drawbacks of the informal sector in enhancing agricultural productivity. Policymakers in Bangladesh should act cautiously, acknowledging the nuances of the informal sector’s influence on agriculture to leverage its potential for sustainable economic growth.</p>
</abstract>

The aim of the study was to investigate the relationship between the informal economy and agricultural productivity in Bangladesh over a 25-year period from 1993 to 2018. While the impact of the black market on the economy is a well-studied topic, its implications for the agricultural sector in this specific country context was less explored. By controlling structural transformation, trade, and foreign direct investment (FDI) in agriculture, the authors employ autoregressive distributed lag (ARDL) using Kripfganz and Schneider’s (2018) approximations, as well as fully modified ordinary least square (FMOLS) and feasible generalized least square (FGLS) techniques. The results reveal that informality initially hampers agricultural productivity in the short term due to reduced government revenue, but in the long run, it acts as an active social protection system, fostering informal employment and providing essential amenities. Although the study’s time span limits the investigation to this specific period, it serves as a crucial attempt to assess the impact of informality on agriculture in Bangladesh, highlighting the need for cautious consideration of both the benefits and drawbacks of the informal sector in enhancing agricultural productivity. Policymakers in Bangladesh should act cautiously, acknowledging the nuances of the informal sector’s influence on agriculture to leverage its potential for sustainable economic growth.

Informal Economy and Agricultural Productivity in Bangladesh: A Time Series Analysis

Associate Prof., Mawlana Bhashani Science and Technology University

Prof., Mawlana Bhashani Science and Technology University

Zagadnienia Ekonomiki Rolnej

This work is licensed under the Creative Commons Attribution 4.0 International License.

The aim of the study was to investigate the relationship between the informal economy and agricultural productivity in Bangladesh over a 25-year period from...

Informal Economy and Agricultural Productivity in Bangladesh: A Time Series Analysis

Published Online: Sep 27, 2023

Page range: 91 - 113

Received: Jun 01, 2023

Accepted: Aug 23, 2023

DOI: https://doi.org/10.30858/zer/171498

Keywords
agricultural productivity, informal economy, structural transformation, autoregressive distributed lag, cointegration.

© 2023 Subrata Saha et al., published by Sciendo

This work is licensed under the Creative Commons Attribution 4.0 International License.

Informal Economy and Agricultural Productivity in Bangladesh: A Time Series Analysis

Published Online: Sep 27, 2023

Page range: 91 - 113

Received: Jun 01, 2023

Accepted: Aug 23, 2023

DOI: https://doi.org/10.30858/zer/171498

Keywordsagricultural productivity, informal economy, structural transformation, autoregressive distributed lag, cointegration.

© 2023 Subrata Saha et al., published by Sciendo

This work is licensed under the Creative Commons Attribution 4.0 International License.

Keywords
agricultural productivity, informal economy, structural transformation, autoregressive distributed lag, cointegration.