Agricultural production of the municipalities of the state of Maranhão, Brazil, and its relationship with rural finance

Abstract

The analysis of the relationship between credit and economic growth is one of the most instigating themes of economic theory. There is a significant set of studies in the international literature that find a positive association between these two phenomena, but a wide range of studies that reveal an opposite relationship are also found. The aim of this study is to test the relationship between the evolution of agricultural product and the dynamics of rural credit within Maranhão municipalities, considering the period extending from 2002 to 2015. Therefore, an econometric model with panel data is used, incorporating other explanatory variables, in addition to credit, such as planted area and bovine herd. The conclusion points to the elevance of the proposed variables as determining factors of agricultural production, although the degree of influence of the negotiated amounts is not as relevant. The explanation suggested for this fragile answer points to questions related to the low level of efficiency in resource allocation, or even to the lack of resources in many locations, considering that a scenario of concentration of funds prevails in municipalities, in addition to specificities inherent to the indicators themselves chosen.