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Rural-urban income gap and agricultural growth in China

Author

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  • Yanyan Gao
  • Jianghuai Zheng
  • Maoliang Bu

Abstract

Purpose - – This paper aims to investigate the effect of rural-urban income gap on agricultural growth in China and its dynamics over time and across regions since reform and opening up. Design/methodology/approach - – Two types of indices are constructed to measure the rural-urban income gap: the intra-provincial index and the inter-provincial index. A provincial panel data from 1978 to 2010 and growth accounting method are used to estimate the size of the adverse effect of rural-urban income gap on agricultural growth in China. Findings - – The empirical results show that both indices of rural-urban income gaps are negatively associated with agriculture output, but the inter-provincial rural-urban income gap produces a larger adverse effect than the intra-provincial rural-urban income gap. Growth accounting analysis further shows that such adverse effects are decreasing over time and are larger in the central provinces. The results represent resource diversion effects of rural-urban income gap on agriculture. Originality/value - – This paper bridges the gap in existing literature on the relationship between sectoral income gaps and agricultural growth, which confirms Schultz's argument that agricultural activities are efficient even in developing countries and the rural resources diverted out by income gap are not surplus. The results imply that equalized rural-urban and regional policies are required to maintain sustainable agricultural growth in China.

Suggested Citation

  • Yanyan Gao & Jianghuai Zheng & Maoliang Bu, 2014. "Rural-urban income gap and agricultural growth in China," China Agricultural Economic Review, Emerald Group Publishing Limited, vol. 6(1), pages 92-107, January.
    • Handle: RePEc:eme:caerpp:v:6:y:2014:i:1:p:92-107
    DOI: 10.1108/CAER-02-2012-0016
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    Citations

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    Cited by:

    1. Zhang, C. & Sun, Y. & Hu, R., 2018. "Does urban-rural income inequality increase agricultural fertilizer or pesticide use? A provincial panel data analysis in China," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277033, International Association of Agricultural Economists.
    2. Jing Chen & Cheng Wang & Ruilian Dai & Shuang Xu & Yue Shen & Mengzhu Ji, 2021. "Practical Village Planning Strategy of Different Types of Villages—A Case Study of 38 Villages in Shapingba District, Chongqing," Land, MDPI, vol. 10(11), pages 1-19, October.
    3. You, Heyuan & Zhang, Xiaoling, 2017. "Sustainable livelihoods and rural sustainability in China: Ecologically secure, economically efficient or socially equitable?," Resources, Conservation & Recycling, Elsevier, vol. 120(C), pages 1-13.
    4. Gao, Yanyan & Zang, Leizhen & Sun, Jun, 2018. "Does computer penetration increase farmers’ income? An empirical study from China," Telecommunications Policy, Elsevier, vol. 42(5), pages 345-360.
    5. Qi Cai & Yushi Cai & Yali Wen, 2018. "Spatially Differentiated Trends between Forest Pest-Induced Losses and Measures for Their Control in China," Sustainability, MDPI, vol. 11(1), pages 1-16, December.

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