Does the synergy between digitalization and sustainability matter for agricultural productivity in Asia?

Abstract

Asia’s agricultural sector faces increasing pressure to enhance productivity while addressing environmental challenges and ensuring food security for a growing population. This study examines key determinants of agricultural productivity in Asia, focusing on the combined influence of digitalisation and sustainability practices. Using panel data for 11 Asian countries from 2012 to 2022, the analysis employs a Fixed-Effects model with robustness checks using the Generalized Method of Moments and Panel Corrected Standard Errors. Quantile Regression and Dumitrescu Hurlin panel Granger causality tests capture heterogeneity and dynamic relationships. The results show that digitalisation indicators, including financial access, internet penetration, and mobile technology, have positive and statistically significant effects on agricultural productivity, with stronger impacts in countries with lower productivity levels. Sustainability related factors such as forest area, organic farming, and irrigation water use also contribute positively, while fertilizer application shows a negative but statistically insignificant effect. Carbon emissions exert a negative influence across productivity quantiles, highlighting environmental constraints. Causality analysis reveals bidirectional relationships between productivity and several digital and sustainability variables, while agricultural GDP and carbon emissions show unidirectional causal effects. The findings highlight the need for policies that integrate digital transformation with sustainable resource management to support agricultural development in Asia.