How economic policy uncertainty affect the scale-up of hog breeding in China?

In recent years, China has promoted large-scale hog farming through various approaches. However, this scale-up process may be affected by economic policy uncertainty. This paper empirically examines the impact of policy uncertainty on hog farming scale-up using provincial panel data from 2016-2022 and a fixed-effects model. Our results indicate that economic policy uncertainty significantly inhibits hog farming scale-up, and this effect remains significant even when we increase the criteria for recognising scale-up, alternative estimation methods include two-stage least squares (2SLS), dynamic panel model and panel Poisson model. Mechanism analysis reveals that economic policy uncertainty not only exacerbates the impact of labour and capital factor prices on scale-up hog farming but also exacerbates the volatility of hog prices, which further raises the risks faced by hog farming and inhibits scale-up hog farming. Heterogeneity analysis reveals that the effect of economic policy uncertainty on hog farming scale-up decreases as farm size increases. Higher-level economic policy uncertainty can inhibit scale-up hog farming, while lower-level economic policy uncertainty can instead promote scale-up hog farming. Economic policy uncertainty has a more obvious inhibitory effect on scale-up hog farming in major development areas. These findings have important implications for the promotion of large-scale hog farming and related policy regulation.