Determinants of Agricultural Trade Competitiveness in Zambia: A Time-Series Cointegration Analysis of Technology, Energy, Investment, Growth, Global Value Chains, and Institutional Quality (1990–2024)

Abstract

Zambia’s agricultural sector employs over 60% of the rural workforce yet captures minimal value in international markets, exporting predominantly unprocessed primary commodities. Identifying which structural factors most strongly drive agricultural trade competitiveness, and how they interact over time, is essential for designing effective policy in a resource-rich but structurally underdeveloped economy. This study investigates the long and short-run determinants of agricultural trade competitiveness in Zambia over 1990-2024, examining the joint role of technological innovation, renewable and non-renewable energy consumption, foreign direct investment, economic growth, global value chain integration, and institutional quality. Annual time-series data are analyzed within an integrated econometric framework comprising Augmented Dickey–Fuller unit root tests, Autoregressive Distributed Lag (ARDL) bounds testing, a Vector Error Correction Model (VECM), Granger causality analysis, mediation analysis, and Fully Modified OLS for robustness. The results reveal that all seven determinants exert statistically significant long-run effects. Global value chain integration (β= 0.517, p < 0.01) and technological innovation (β = 0.462, p < 0.01) emerge as the dominant drivers, followed by economic growth (0.398), institutional quality (0.336), renewable energy (0.285), foreign direct investment (0.241), and a marginally negative effect of non-renewable energy (−0.172). The error correction term (−0.641, p < 0.001) implies that approximately 64% of deviations from long-run equilibrium are corrected within one year. Mediation analysis confirms that technological innovation operates partially through GVC participation (indirect effect = 0.238) and institutional capacity (0.147), while FDI partly enhances competitiveness through technological transfer. The findings indicate that agricultural competitiveness is system-driven rather than dependent on a single lever, supporting an integrated, sequenced policy strategy combining short-term institutional reform and medium-term infrastructure expansion and value-chain deepening. The study extends endogenous growth, national innovation systems, and global value chain theory to a low-institutional-capacity Sub-Saharan African setting and provides empirically grounded guidance for sustainable agricultural transformation.