Moderating Role of Governance and Technology in Mitigating the Impact of Climate Change on Cereal Yield: Evidence From Selected Emerging Economies

ABSTRACT The present study evaluates how climatic variables, governance effectiveness, irrigation technology and agricultural credit impact cereal yield. Further, it examines how governance effectiveness and irrigation technology moderate the effects of maximum temperature on cereal yield across thirty emerging nations from 2001 to 2023. Utilising Fixed Effects estimation with Driscoll‐Kraay standard errors, supported by Feasible Generalised Least Squares and System Generalised Method of Moments, this study reveals that maximum temperature has a negative effect while precipitation, irrigation technology and agricultural credit significantly enhance cereal yield across all specifications. Subsample analysis based on governance heterogeneity indicates that temperature damage in above‐median‐governance economies is approximately eight times greater than in below‐median‐governance economies, providing strong evidence for a governance‐mediated climate effect. It further shows that governance effectiveness partially mitigates temperature damage while irrigation technology substantially mitigates it in the long‐term cross‐sectional specification. These findings directly suggest implications for Sustainable Development Goals 2 and 13, underlining institutional strengthening and irrigation investment as mutually reinforcing climate adaptation strategies.