Can Improving Agricultural Benefits Promote Total Factor Productivity?

Abstract

We assessed the influence of agricultural benefits on agricultural total factor productivity (TFP) by using macro panel data of 13 major grain-growing provinces of China from 2006 to 2016. Multiple estimation methods were used, including OLS, 2SLS, FE models, and instrumental variables. We test the impact, heterogeneity and action mechanism. We found agricultural benefits exert a positive impact on agricultural TFP, and that the effects of profit, income, and price on agricultural TFP increase successively. The higher the economic strength or grain production capacity is, the greater the promotion effect of price on agricultural TFP will be. Price can promote agricultural TFP through the mediating factor of investments into agricultural fixed assets. Improving agricultural benefits can help to promote TFP, thus achieving the dual goal of increasing both agricultural production and income.