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How Off-farm Employment Affects Technical Efficiency of China's Farms: The Case of Jiangsu

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  • Linxiu Zhang
  • Weiliang Su
  • Tor Eriksson
  • Chengfang Liu

Abstract

Using three-wave survey data for four villages of Jiangsu Province in China, the present paper examines whether and to what extent off-farm employment affects the technical efficiency of agricultural production. The level of technical efficiency is measured using a stochastic frontier production function approach. Based on estimation results from instrumental variable panel quantile regressions we find that there is a positive significant effect of off-farm employment on the level of farm technical efficiency. We also find that fragmentation of farmland is a barrier to the improvement of technical efficiency. In addition, we find a downward trend in the level of agricultural technical efficiency among our sample. Therefore, the Chinese Government should stimulate agricultural mechanization and the development of farming techniques to improve technical efficiency in the context of increasing off-farm employment.

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  • Linxiu Zhang & Weiliang Su & Tor Eriksson & Chengfang Liu, 2016. "How Off-farm Employment Affects Technical Efficiency of China's Farms: The Case of Jiangsu," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 24(3), pages 37-51, May.
    • Handle: RePEc:bla:chinae:v:24:y:2016:i:3:p:37-51
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    3. Ming Chang & Jing Liu & Hongxu Shi & Tianfeng Guo, 2022. "The Effect of Off-Farm Employment on Agricultural Production Efficiency: Micro Evidence in China," Sustainability, MDPI, vol. 14(6), pages 1-12, March.
    4. Hayatullah Ahmadzai, 2022. "Hope for Change: Is Diversifying Production Portfolios an Ideal Strategy to Boost Farming Efficiency in Afghanistan?," Progress in Development Studies, , vol. 22(1), pages 7-31, January.
    5. Yahui Wang, 2019. "What Affects Participation in the Farmland Rental Market in Rural China? Evidence from CHARLS," Sustainability, MDPI, vol. 11(24), pages 1-15, December.
    6. Muhammad Rizwan & Ping Qing & Abdul Saboor & Muhammad Amjed Iqbal & Adnan Nazir, 2020. "Production Risk and Competency among Categorized Rice Peasants: Cross-Sectional Evidence from an Emerging Country," Sustainability, MDPI, vol. 12(9), pages 1-15, May.
    7. Hayatullah Ahmadzai, 2017. "Crop Diversification and Technical Efficiency in Afghanistan: Stochastic Frontier Analysis," Discussion Papers 2017-04, University of Nottingham, CREDIT.
    8. Shi, Hongxu & Xu, Hao & Gao, Wei & Zhang, Jinhao & Chang, Ming, 2022. "The impact of energy poverty on agricultural productivity: The case of China," Energy Policy, Elsevier, vol. 167(C).
    9. Li, Xinyi & Ito, Junichi, 2023. "Determinants of technical efficiency and farmers’ crop choice rationality: A case study of rural Gansu, China," Journal of Asian Economics, Elsevier, vol. 84(C).
    10. Mondal, Ripon Kumar & Selvanathan, Eliyathamby A & Selvanathan, Saroja, 2020. "The impact of rural nonfarm employment on agricultural input use and productivity in Bangladesh," 2020 Conference (64th), February 12-14, 2020, Perth, Western Australia 305251, Australian Agricultural and Resource Economics Society.

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