Does Foreign Direct Investment Affect Agricultural Value Add in Cambodia? Study with ARDL Approach

English

Abstract

This study looks at how macroeconomic factors including Foreign Direct Investment and GDP relate in the long and short term to the agricultural sector which is the pillar of the Cambodian economy. We use the World Bank as a supplementary source for statistics data, namely data from 2000 to 2020. We find that the variables we expect to have varying relationships with exports in Cambodia, in the short term the previous year's agricultural value added is the dominant factor influencing this year's agricultural value added, followed by foreign direct investment. The ARDL test found that when foreign direct investment increases, it will provide a positive sentiment toward increasing the added value of agriculture in Cambodia; Accordingly, the gross domestic product variable is also the same. This shows that in Cambodia foreign direct investment remains the dominant factor affecting the added value of agriculture both in the long and short term, but other variables have a better effect in the short term on the added value of agriculture in Cambodia.