Modeling the impact assessment of agricultural sector on economic development as a basis for the country’s investment potential

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In the context of countries integration into the world economic space, agricultural sector is one of the priorities and strategically important sectors of the national economy. Development of instruments aimed to increase investment potential of this sector is therefore an important component of the country’s economy growth. The article proposes a science-based model of the impact of the agricultural sector on the economic development level of countries trying to move towards European integration.
It was found that the employment rate (+58.4) has the largest influence on the rate of GDP change in the studied group of countries (Ukraine, Moldova, Georgia, Armenia). The impact of the gross value added of the manufacturing sector on its economic growth is positive (+44.6). The negative foreign direct investment ratio in the model (–40.3) may be due to the fact that the indicator in the studied countries is still largely influenced by the intervention of the state mechanism, significant uncertainty and risk, which is a deterrent to the overall economic development. An important result of the study was that foreign direct investment had a negative impact on economic growth in developing countries. Further development of the investment potential of a country’s agricultural sector provides for a radical acceleration of scientific and technological progress and, on this basis, a reduction in the cost of a unit of agricultural products and food and an increase in their competitiveness in the domestic and world markets.

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    • Figure 1. The process of defining a spatial and a temporal variable
    • Figure 2. Results of the assessment of the economic development model in countries trying to join the EU (fixed effects)
    • Figure 3. Results of the assessing the impact of financialization on the level of economic development in the countries trying to join the EU (random effects)
    • Figure 4. Results of the Breusch-Pagan test
    • Figure 5. Results of estimating the influence of the share of GDP created in the agricultural sector on the country’s economic development level
    • Figure 6. Results of assessing the impact of cereal production on the economic development level of the country
    • Figure 7. Results of the impact assessment of the share of land cultivated on the level of country’s economic development
    • Table 1. Correlation matrix of economic development indicators