Climate Risk, Agricultural Investment Strategy, and Sustainable Productivity Resilience: Evidence from Arab Economies

Purpose-This study examines the relationship between climate risk, agricultural investment strategies, production intensity and economic development in shaping cereal productivity across Arab economies. The research aims to provide empirical insights into how climate-related factors and agricultural investment interact to influence productivity outcomes in climate-vulnerable agricultural systems. Design/methodology/approach-The study employs a balanced panel dataset covering 15 Arab economies over the period 1990-2023. Multiple econometric approaches are applied, including pooled ordinary least squares, two-way fixed effects models, dynamic panel estimation and interaction analysis. The empirical framework evaluates the effects of agricultural inputs, capital investment, greenhouse gas emissions and temperature variability on cereal productivity while also examining the moderating role of irrigation as a climate adaptation mechanism. Findings-The results reveal strong persistence in agricultural productivity and show that production intensification is positively associated with cereal yields. Agricultural greenhouse gas emissions exhibit a significant positive relationship with productivity, suggesting that output improvements are currently linked to input-intensive agricultural systems. Temperature change displays a negative but statistically weak relationship with productivity. The interaction analysis indicates that irrigation infrastructure does not significantly moderate the effect of climate variability on cereal productivity. These findings suggest that productivity improvements in Arab agriculture are largely driven by intensification rather than climateresilient transformation. Research limitations/implications-The analysis focuses primarily on cereal productivity and selected agricultural inputs. Future research could incorporate additional climate indicators, water scarcity measures and technological innovation variables to provide a broader understanding of climate-resilient agricultural development. Practical Implications-The findings highlight the importance of promoting climate-smart agricultural investment strategies, including efficient irrigation technologies, sustainable input management and lowemission agricultural practices to enhance productivity while reducing environmental pressures. Originality/Value-This study provides new empirical evidence on the interaction between climate risk, agricultural investment strategies and environmental externalities in Arab economies. By combining multiple panel estimation techniques and examining climate adaptation mechanisms, the study contributes to the emerging literature on sustainable agricultural productivity and climate governance.