The Effect of Institutional Quality on Agricultural Value Added in ASEAN–8

Abstract

This study investigates the effect of institutional quality on agricultural value added in ASEAN. It uses a panel dataset from 2007 to 2021 from eight ASEAN countries. The data obtained from the World Bank was analyzed using the Random Effect Model (REM). The results show that regulatory quality, gross fixed capital formation, and arable land positively affect agricultural value-added. The results imply that institutional quality is vital in dictating the growth of agricultural value-added in ASEAN. In this region, regulatory quality increases agricultural value-added. Governments should thus work to strengthen and improve the performance of such institutions, which is essential for a sustained increase in agricultural value-added.