Trade Openness and Agricultural Land Use Dynamics: Evidence from Selected Developing Economies

This study examines the long-run relationship between trade openness, economic development, urbanization, and agricultural land use in developing economies. Using a panel of 20 developing countries covering the period 1990–2023, the analysis adopts a land systems perspective to assess how global economic integration influences land use dynamics. Agricultural land, measured as a share of total land area, is employed to capture changes in land allocation associated with structural transformation. Given the presence of cross-sectional dependence and slope heterogeneity, second-generation panel econometric methods are applied. Panel unit root tests indicate that all variables are integrated of order one, while the Westerlund cointegration test provides strong evidence of a long-run equilibrium relationship among the variables. Long-run coefficients are estimated using the Augmented Mean Group (AMG) estimator, which accounts for heterogeneous country-specific effects and unobserved common factors. Dumitrescu–Hurlin panel causality tests are further employed to explore causal interactions. The findings identify long-run structural interdependence and feedback patterns at the macro level rather than precise causal mechanisms or policy transmission channels. The results reveal a stable long-run linkage between agricultural land use, trade openness, income levels, and urbanization, with notable heterogeneity across countries. Bidirectional causality between trade openness and agricultural land use highlights feedback mechanisms between economic integration and land systems, underscoring the need to integrate land use considerations into trade and development policies.