Abstract

Abstract In this paper, we examine relationship between financial intermediary development variables and values added of agricultural sector in Iran during 1352 to 1385. The five indices derived from the banking system as a financial intermediary development indicators, that define in related to the agricultural sector, and with the introduction of statistic methods of factor analysis and its applications, several financial indicators transform to a comprehensive index, and use a cointegration method Engel – Granger, the relationship with financial intermediary development variables and values added of agricultural sector is estimated. Also, using Granger causality test, the Causality relationship between these variables will be evaluated. Results of this study indicate that between financial intermediary development variables and values added of agricultural sector is a direct relationship, but about the causality relationship between them cannot be commented. Keywords: Financial intermediary development, Values added of agricultural sector, Factor analysis, Granger causality test JEL Classification: G10, Q10, Q14

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