An Investigation into the Influence of Bank Loans Granted to Agriculture Sector on Iranian Economic Growth

Abstract

Reaching a favorable economic growth is one of the main economic targets of every society on which agricultural activities influence a lot. Iranian agriculture sector can play a positive role in national economy growth. Factors which can increase value-added in agriculture sector receive more attention and are supported by government. Implementation of widespread economic plans in agricultural sector in developing countries like Iran requires huge investments and financial resources. Therefore, developing countries like Iran rely highly on bank credits and loans for financing agriculture activities. Therefore, the present research aims to investigate the influence of bank loans on agriculture sector and economic growth in Iran during 1991-2012. To this end, the present research investigates reliability and determines causal relationships among research variables and then makes use of VAR method for estimating research model. The results showed that bank loans and degree of economic freedom have positive impacts on economic growth in Iran in the studied period.

DOI: 10.5901/mjss.2015.v6n6s2p722