Agricultural value-added growth: exploring the impact of trade, inputs and environmental factors

Purpose The study aims to comprehensively analyze how macroeconomic factors – particularly agricultural trade and inflation – and microeconomic factors such as labor, productivity and input efficiency influence agricultural value-added growth in ASEAN. Specifically, the paper examines short- and long-term linkages among these variables using a dynamic approach. Design/methodology/approach Using data from 1990 to 2023 sourced from the World Bank, this study applies the autoregressive distributed lag (ARDL) model to analyze macroeconomic impacts and the generalized method of moments (GMM) model to examine microeconomic factors influencing agricultural value added. Findings Agricultural value added is significantly influenced by past performance, employment, trade, land use and CO2 emissions. Employment has a negative effect in the short term but a positive impact in the long term. Exports of raw agricultural materials negatively affect value added, whereas trade in processed agricultural products has a positive effect. Inefficient land use and high CO2 emissions also impede agricultural performance. Research limitations/implications This study does not include variables such as effects of climate change or specific government policies, which should be addressed in future research. Originality/value This study integrates macroeconomic and microeconomic perspectives to comprehensively analyze agricultural value added in ASEAN. It highlights the dual role of international trade as both a growth driver and a source of environmental pressure. The findings recommend improving labor skills, shifting exports toward processed products, promoting technological intensification and supporting sustainable practices. These insights are vital for advancing sustainable and inclusive agricultural development in ASEAN.