Economic justification of the impact of investment on agricultural production in Kazakhstan

Abstract

Background and Аim. In Kazakhstan's current environment, the efficiency of agricultural production depends on factors such as investment, human resources, and capital. An economic justification reflecting the impact of these indicators on the volume of output will make it possible to determine the impact of investment on output. The aim of the study is an economic and statistical analysis describing the relationship between investment and human resources with gross output.
Materials and Methods. Data from the Bureau of National Statistics of the Agency for Strategic Planning and Reforms of the Republic of Kazakhstan were used for the analysis.
The Cobb-Douglas production function, which describes the dependence of output on capital and labor, was used as the base model. The Vector Error Correction Model was applied. The VECM is used when several indicators (output, investment, human factors) exhibit long-term cointegration, while their short-term dynamics may diverge. For time series analysis, where it is important to separate short-term effects (the immediate impact of investment and prices) from long-term effects (the stable equilibrium between output and factors), the ARDL model was used.
Results. The obtained results show statistical significance for capital and labor, with elasticities of 0.42 and 0.53, respectively. The total returns to scale are α + β = 0.95, slightly below unity, which indicates diminishing returns as all factors increase simultaneously. This highlights the need for technological upgrading, increased efficiency, and the implementation of digital solutions. The model's results demonstrate a high R2 of 0.98, confirming its applicability for strategic analysis. The results confirm the importance of capital and labor. The elasticity of output with respect to capital is positive and less than one, reflecting a moderate return on investment, while the elasticity with respect to labor is higher than that of capital, which corresponds to the structure of the agro-industrial complex, which remains significantly dependent on the human factor. The total returns to scale α+β are close to unity, but somewhat lower, indicating diminishing returns from a simultaneous proportional increase in all factors and the need for technological upgrading to achieve high efficiency.
Conclusion. Economic justification can be used to identify the relationship between the influence of capital and human capital on increasing agricultural output. The results contribute to an increase in the volume of products obtained, thereby developing the agro-industrial complex, and also allow us to recommend the most productive strategies.