📄 Abstract
This study empirically investigates the relationship between cereal production and gross capital formation in Ukraine within the framework of the CobbDouglas production function using annual time series data from 19912025 obtained from the World Bank. In the study, logarithm of cereal production (metric tons) was specified as the dependent variable, while gross capital formation (annual % growth) was treated as the independent variable. A Vector Error Correction Model (VECM) was employed following stationarity tests. The findings reveal the existence of a significant long-run equilibrium relationship between the variables. The VECM results indicate that gross capital formation exerts a negative and statistically significant short-run effect on cereal production (ß = -0.008219, p < 0.05), while the error correction term (-1.114614) confirms a rapid adjustment toward long-run equilibrium. The adjusted R-squared value of 0.615013 suggests that approximately 62% of the variations in cereal production are explained by gross capital formation. The study recommends increased targeted investment in agricultural infrastructure, mechanization, irrigation systems, and agricultural research to enhance productivity, food security, and sustainable economic growth in Ukraine.
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📚 How to Cite:
Nzamuhiki Justus, Nahabwe Patrick Kagambo John , CEREAL PRODUCTION VERSUS GROSS CAPITAL FORMATION IN UKRAINE: AN EMPIRICAL INVESTIGATION OF COBB-DOUGLAS PRODUCTION FUNCTION , Volume 14 , Issue 5, May 2026, EPRA International Journal of Agriculture and Rural Economic Research (ARER) , DOI: https://doi.org/10.36713/epra27661