Interaction and Non-neutral Effects of Factors in Chinese Wheat Production
AbstractIn this paper we examine the role of the interaction between labour productivity and the use of factors in explaining the recent (1998-2007) 11% decline in wheat production in China. We employ a non-neutral stochastic production frontier approach that enables us to identify the interaction and non-neutral effects of factors that are used in wheat production. For regional level wheat production in China we find that identifying the technical inefficiency effects and the non-neutral effects of factors assist big time in explaining the recent decline in wheat production. A higher level of labour productivity can stimulate efficiency gains in production, but adding more labour to the workforce or adding to the stock of machinery power can depress this potential marginal efficiency gain. We also find significant marginal efficiency gain of land reforms that add to the stock of cultivable land. Our results indicate that future agricultural reforms in China should address the incentive scheme for labour.
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Bibliographic InfoPaper provided by Cardiff University, Cardiff Business School, Economics Section in its series Cardiff Economics Working Papers with number E2010/17.
Length: 26 pages
Date of creation: Dec 2010
Date of revision:
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China; Stochastic Frontier; Factor Interaction; Non neutrality; Agriculture; Wheat Production;
Find related papers by JEL classification:
- N55 - Economic History - - Agriculture, Natural Resources, Environment and Extractive Industries - - - Asia including Middle East
- O13 - Economic Development, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
- O53 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
- Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
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