Crop Yield Growth and Resource Allocation: A Comparative Analysis of OECD and LAC Countries

The deployment of agricultural inputs considerably influences national agrarian output, which is a key driver of economic growth. This study contributes to the literature by examining how changes in crop yield growth reflect resource allocation in agricultural production. Data spanning 1994 to 2019, obtained from the World Bank, were used to examine the impact of agricultural input productivity on agricultural output. The 26-year time-series data were employed for the Organization for Economic Co-operation and Development (OECD) and Latin American Caribbean (LAC). The findings from the Autoregressive Distributed Lag model, along with the Vector Error Correction Model, reveal a negative but significant long-term impact of agricultural land use on crop yields in OECD, and a negative and insignificant impact in LAC countries. Moreover, agricultural land use showed a positive but insignificant short-run effect on crop yield in OECD countries, while a negative and insignificant short-run effect was observed in LAC countries. This study highlights disparities in agricultural productivity drivers between OECD and LAC regions. By linking productivity dynamics with input utilization, the analysis provides policy-relevant insights for improving sustainability, food security, and agricultural productivity.