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The overall spatial spillover effects of local agricultural policy: A study on China's corn stockpiling policy based on Adaptive Expectation Theory and Spatial Durbin Model

Author

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  • Yue Liu

    (School of Economics and Finance, Chonqing University of Technology, Chongqing, P.R. China)

  • Haoran Yang

    (School of Economics, Southwest University of Political Science and Law, Chongqing, P.R. China)

Abstract

In 2007, the Chinese government introduced a temporary corn storage policy targeting four regions: Heilongjiang, Jilin, Liaoning and Inner Mongolia. This policy aimed at stabilising grain markets and ensured farmers' income by providing price support for corn. Its implementation significantly impacted corn prices and the regional distribution of corn cultivation, offering a valuable case for analysing the economic outcomes of China's agricultural policies. This study adopts the adaptive expectations hypothesis to explore the policy's effects, focusing on its influence on farmers' price expectations (mean) and price volatility (variance). Using a Spatial Durbin Model (SDM), we empirically investigate the policy's dynamic regional impacts on corn planting areas. The results show that the temporary corn storage policy significantly increased corn planting areas in the targeted regions, while simultaneously reducing planting areas in non-targeted regions due to negative spatial spillover effects. At the national level, the policy had no statistically significant impact on total corn planting areas, indicating that abolishing the policy alone is unlikely to rationalise or optimise the agricultural planting structure.

Suggested Citation

  • Yue Liu & Haoran Yang, 2025. "The overall spatial spillover effects of local agricultural policy: A study on China's corn stockpiling policy based on Adaptive Expectation Theory and Spatial Durbin Model," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 71(3), pages 160-172.
    • Handle: RePEc:caa:jnlage:v:71:y:2025:i:3:id:9-2024-agricecon
    DOI: 10.17221/9/2024-AGRICECON
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    1. Marc Nerlove, 1958. "Adaptive Expectations and Cobweb Phenomena," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 72(2), pages 227-240.
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    3. Branco, José Eduardo Holler & Bartholomeu, Daniela Bacchi & Alves Junior, Paulo Nocera & Caixeta Filho, José Vicente, 2021. "Mutual analyses of agriculture land use and transportation networks: The future location of soybean and corn production in Brazil," Agricultural Systems, Elsevier, vol. 194(C).
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