IDEAS home Printed from https://ideas.repec.org/a/eee/deveco/v132y2018icp18-31.html
   My bibliography  Save this article

Agricultural reforms and production in China: Changes in provincial production function and productivity in 1978–2015

Author

Listed:
  • Gong, Binlei

Abstract

A series of fundamental and market-oriented reforms since 1978 have dramatically reshaped China's agricultural sector, which had been sluggish during the socialist period. Besides productivity growth and efficiency changes, the shape of the production function may also transform rapidly over time. Moreover, the four segments in agriculture (farming, forestry, animal husbandry, and fisheries) have different production processes and techniques, so the aggregated production function of agriculture may vary across provinces. Compared with existing studies, which usually assume a fixed production function, this paper allows a varying coefficient production function that can better capture the structure change in the six reform periods over the past four decades. The empirical results show that the labor elasticity is decreasing, the fertilizer and machinery elasticities are increasing, and the land elasticity has a U-shaped curve across time. Moreover, technology and inputs are leading the growth alternatively in different reform periods.

Suggested Citation

  • Gong, Binlei, 2018. "Agricultural reforms and production in China: Changes in provincial production function and productivity in 1978–2015," Journal of Development Economics, Elsevier, vol. 132(C), pages 18-31.
  • Handle: RePEc:eee:deveco:v:132:y:2018:i:c:p:18-31
    DOI: 10.1016/j.jdeveco.2017.12.005
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0304387817301189
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Carter, Colin A. & Estrin, Andrew J., 2001. "Market Reforms Versus Structural Reforms in Rural China," Journal of Comparative Economics, Elsevier, vol. 29(3), pages 527-541, September.
    2. Fan, Shenggen & Zhang, Linxiu & Zhang, Xiaobo, 2004. "Reforms, Investment, and Poverty in Rural China," Economic Development and Cultural Change, University of Chicago Press, vol. 52(2), pages 395-421, January.
    3. Fan, Shenggan & Pardey, Philip G., 1997. "Research, productivity, and output growth in Chinese agriculture," Journal of Development Economics, Elsevier, vol. 53(1), pages 115-137, June.
    4. Stacy Eller & Peter Hartley & Kenneth Medlock, 2011. "Empirical evidence on the operational efficiency of National Oil Companies," Empirical Economics, Springer, vol. 40(3), pages 623-643, May.
    5. Yujiro Hayami, 1969. "Sources of Agricultural Productivity Gap Among Selected Countries," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 51(3), pages 564-575.
    6. David K. Lambert & Elliott Parker, 1998. "Productivity in Chinese Provincial Agriculture," Journal of Agricultural Economics, Wiley Blackwell, vol. 49(3), pages 378-392, September.
    7. Amsler, Christine & Prokhorov, Artem & Schmidt, Peter, 2016. "Endogeneity in stochastic frontier models," Journal of Econometrics, Elsevier, vol. 190(2), pages 280-288.
    8. Zhang, Rui & Sun, Kai & Delgado, Michael S. & Kumbhakar, Subal C., 2012. "Productivity in China's high technology industry: Regional heterogeneity and R&D," Technological Forecasting and Social Change, Elsevier, vol. 79(1), pages 127-141.
    9. Diewert, Walter E & Wales, Terence J, 1987. "Flexible Functional Forms and Global Curvature Conditions," Econometrica, Econometric Society, vol. 55(1), pages 43-68, January.
    10. Fan, Shenggen & Zhang, Linxiu & Zhang, Xiaobo, 2002. "Growth, inequality, and poverty in rural China: the role of public investments," Research reports 125, International Food Policy Research Institute (IFPRI).
    11. Mao, Weining & Koo, Won W., 1997. "Productivity growth, technological progress, and efficiency change in chinese agriculture after rural economic reforms: A DEA approach," China Economic Review, Elsevier, vol. 8(2), pages 157-174.
    12. Shenggen Fan, 1991. "Effects of Technological Change and Institutional Reform on Production Growth in Chinese Agriculture," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 73(2), pages 266-275.
    13. Brummer, B. & Glauben, T. & Lu, W., 2006. "Policy reform and productivity change in Chinese agriculture: A distance function approach," Journal of Development Economics, Elsevier, vol. 81(1), pages 61-79, October.
    14. Kumbhakar, Subal C., 1990. "Production frontiers, panel data, and time-varying technical inefficiency," Journal of Econometrics, Elsevier, vol. 46(1-2), pages 201-211.
    15. McMillan, John & Whalley, John & Zhu, Lijing, 1989. "The Impact of China's Economic Reforms on Agricultural Productivity Growth," Journal of Political Economy, University of Chicago Press, vol. 97(4), pages 781-807, August.
    16. Huang, Jikun & Rozelle, Scott, 1996. "Technological change: Rediscovering the engine of productivity growth in China's rural economy," Journal of Development Economics, Elsevier, vol. 49(2), pages 337-369, May.
    17. Justin Yifu Lin, 1995. "Endowments, Technology, and Factor Markets: A Natural Experiment of Induced Institutional Innovation from China's Rural Reform," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 77(2), pages 231-242.
    18. Hayfield, Tristen & Racine, Jeffrey S., 2008. "Nonparametric Econometrics: The np Package," Journal of Statistical Software, Foundation for Open Access Statistics, vol. 27(i05).
    19. Hayami, Yujiro & Ruttan, Vernon W, 1970. "Agricultural Productivity Differences Among Countries," American Economic Review, American Economic Association, vol. 60(5), pages 895-911, December.
    20. Tong, Haizhi & Fulginiti, Lilyan E. & Sesmero, Juan P., 2009. "Chinese Regional Agricultural Productivity: 1994-2005," 2009 Conference, August 16-22, 2009, Beijing, China 51784, International Association of Agricultural Economists.
    21. Cao, Kang Hua & Birchenall, Javier A., 2013. "Agricultural productivity, structural change, and economic growth in post-reform China," Journal of Development Economics, Elsevier, vol. 104(C), pages 165-180.
    22. Jianqing Fan & Runze Li, 2004. "New Estimation and Model Selection Procedures for Semiparametric Modeling in Longitudinal Data Analysis," Journal of the American Statistical Association, American Statistical Association, vol. 99, pages 710-723, January.
    23. K.P. Kalirajan & M.B. Obwona & S. Zhao, 1996. "A Decomposition of Total Factor Productivity Growth: The Case of Chinese Agricultural Growth before and after Reforms," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 78(2), pages 331-338.
    24. Alejandro Nin Pratt & Bingxin Yu & Shenggen Fan, 2008. "The total factor productivity in China and India: new measures and approaches," China Agricultural Economic Review, Emerald Group Publishing, vol. 1(1), pages 9-22, September.
    25. Robert Dekle & Guillaume Vandenbroucke, 2010. "Whither Chinese Growth? A Sectoral Growth Accounting Approach," Review of Development Economics, Wiley Blackwell, vol. 14(s1), pages 487-498, August.
    26. Meeusen, Wim & van den Broeck, Julien, 1977. "Efficiency Estimation from Cobb-Douglas Production Functions with Composed Error," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 18(2), pages 435-444, June.
    27. Olley, G Steven & Pakes, Ariel, 1996. "The Dynamics of Productivity in the Telecommunications Equipment Industry," Econometrica, Econometric Society, vol. 64(6), pages 1263-1297, November.
    28. Stevenson, Rodney E., 1980. "Likelihood functions for generalized stochastic frontier estimation," Journal of Econometrics, Elsevier, vol. 13(1), pages 57-66, May.
    29. Huang,Yiping, 1998. "Agricultural Reform in China," Cambridge Books, Cambridge University Press, number 9780521620550, December.
    30. Greene, William H., 1990. "A Gamma-distributed stochastic frontier model," Journal of Econometrics, Elsevier, vol. 46(1-2), pages 141-163.
    31. Schmidt, Peter & Sickles, Robin C, 1984. "Production Frontiers and Panel Data," Journal of Business & Economic Statistics, American Statistical Association, vol. 2(4), pages 367-374, October.
    32. George Battese & D. Rao & Christopher O'Donnell, 2004. "A Metafrontier Production Function for Estimation of Technical Efficiencies and Technology Gaps for Firms Operating Under Different Technologies," Journal of Productivity Analysis, Springer, vol. 21(1), pages 91-103, January.
    33. Daniel A. Ackerberg & Kevin Caves & Garth Frazer, 2015. "Identification Properties of Recent Production Function Estimators," Econometrica, Econometric Society, vol. 83, pages 2411-2451, November.
    34. Yair Mundlak & René Hellinghausen, 1982. "The Intercountry Agricultural Production Function: Another View," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 64(4), pages 664-672.
    35. George E. Battese & D. S. Prasada Rao, 2002. "Technology Gap, Efficiency, and a Stochastic Metafrontier Function," International Journal of Business and Economics, School of Management Development, Feng Chia University, Taichung, Taiwan, vol. 1(2), pages 87-93, August.
    36. Lin, Justin Yifu, 1992. "Rural Reforms and Agricultural Growth in China," American Economic Review, American Economic Association, vol. 82(1), pages 34-51, March.
    37. Fan, Shenggen & Zhang, Xiaobo, 2002. "Production and Productivity Growth in Chinese Agriculture: New National and Regional Measures," Economic Development and Cultural Change, University of Chicago Press, vol. 50(4), pages 819-838, July.
    38. Fan, Yanqin & Li, Qi & Weersink, Alfons, 1996. "Semiparametric Estimation of Stochastic Production Frontier Models," Journal of Business & Economic Statistics, American Statistical Association, vol. 14(4), pages 460-468, October.
    39. James Levinsohn & Amil Petrin, 2003. "Estimating Production Functions Using Inputs to Control for Unobservables," Review of Economic Studies, Oxford University Press, vol. 70(2), pages 317-341.
    40. Chen, Po-Chi & Yu, Ming-Miin & Chang, Ching-Cheng & Hsu, Shih-Hsun, 2008. "Total factor productivity growth in China's agricultural sector," China Economic Review, Elsevier, vol. 19(4), pages 580-593, December.
    41. Kim, Young-Ju, 2013. "A partial spline approach for semiparametric estimation of varying-coefficient partially linear models," Computational Statistics & Data Analysis, Elsevier, vol. 62(C), pages 181-187.
    42. Sun, Kai & Kumbhakar, Subal C., 2013. "Semiparametric smooth-coefficient stochastic frontier model," Economics Letters, Elsevier, vol. 120(2), pages 305-309.
    43. Su, Liangjun & Ullah, Aman, 2006. "Profile likelihood estimation of partially linear panel data models with fixed effects," Economics Letters, Elsevier, vol. 92(1), pages 75-81, July.
    44. Sun Ling Wang & Francis Tuan & Fred Gale & Agapi Somwaru & James Hansen, 2013. "China's regional agricultural productivity growth in 1985–2007: A multilateral comparison," Agricultural Economics, International Association of Agricultural Economists, vol. 44(2), pages 241-251, March.
    45. Cornwell, Christopher & Schmidt, Peter & Sickles, Robin C., 1990. "Production frontiers with cross-sectional and time-series variation in efficiency levels," Journal of Econometrics, Elsevier, vol. 46(1-2), pages 185-200.
    46. Yanjie Zhang & Bernhard Brümmer, 2011. "Productivity change and the effects of policy reform in China's agriculture since 1979," Asian-Pacific Economic Literature, Asia Pacific School of Economics and Government, The Australian National University, vol. 25(2), pages 131-150, November.
    47. Stasinopoulos, D. Mikis & Rigby, Robert A., 2007. "Generalized Additive Models for Location Scale and Shape (GAMLSS) in R," Journal of Statistical Software, Foundation for Open Access Statistics, vol. 23(i07).
    48. Wen, Guanzhong James, 1993. "Total Factor Productivity Change in China's Farming Sector: 1952-1989," Economic Development and Cultural Change, University of Chicago Press, vol. 42(1), pages 1-41, October.
    49. Aigner, Dennis & Lovell, C. A. Knox & Schmidt, Peter, 1977. "Formulation and estimation of stochastic frontier production function models," Journal of Econometrics, Elsevier, vol. 6(1), pages 21-37, July.
    50. Lau, Lawrence J. & Yotopoulos, Pan A., 1989. "The meta-production function approach to technological change in world agriculture," Journal of Development Economics, Elsevier, vol. 31(2), pages 241-269, October.
    51. Sickles, Robin C., 2005. "Panel estimators and the identification of firm-specific efficiency levels in parametric, semiparametric and nonparametric settings," Journal of Econometrics, Elsevier, vol. 126(2), pages 305-334, June.
    52. Yanrui Wu, 2011. "Total factor productivity growth in China: a review," Journal of Chinese Economic and Business Studies, Taylor & Francis Journals, vol. 9(2), pages 111-126.
    53. W, Y, 1995. "Productivity Growth, Technological Progress, and Technical Efficiency Change in China: A Three-Sector Analysis1," Journal of Comparative Economics, Elsevier, vol. 21(2), pages 207-229, October.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Gong, Binlei, 2018. "Interstate competition in agriculture: Cheer or fear? Evidence from the United States and China," Food Policy, Elsevier, vol. 81(C), pages 37-47.
    2. Zhuo-wan Liu & Tomas Balezentis & Yao-yao Song & Guo-liang Yang, 2019. "Estimating Capacity Utilization of Chinese State Farms," Sustainability, MDPI, Open Access Journal, vol. 11(18), pages 1-29, September.
    3. Hongyun Han & Shu Wu, 2018. "Structural Change and Its Impact on the Energy Intensity of Agricultural Sector in China," Sustainability, MDPI, Open Access Journal, vol. 10(12), pages 1-23, December.
    4. Chao Zhang & Ruifa Hu, 2020. "Does Fertilizer Use Intensity Respond to the Urban-Rural Income Gap? Evidence from a Dynamic Panel-Data Analysis in China," Sustainability, MDPI, Open Access Journal, vol. 12(1), pages 1-15, January.
    5. Wang, Sun Ling & Huang, Jikun & Wang, Xiaobing & Tuan, Francis, 2019. "Are China’s regional agricultural productivities converging: How and why?," Food Policy, Elsevier, vol. 86(C), pages 1-1.
    6. Yuquan W. Zhang & Jianhong E. Mu & Mark Musumba & Bruce A. McCarl & Xiaokun Gu & Yuanfei Zhou & Zhengwei Cao & Qiang Li, 2018. "The Role of Climate Factors in Shaping China’s Crop Mix: An Empirical Exploration," Sustainability, MDPI, Open Access Journal, vol. 10(10), pages 1-17, October.
    7. Qiangqiang Zhang & Beibei Yan & Xuexi Huo, 2018. "What Are the Effects of Participation in Production Outsourcing? Evidence from Chinese Apple Farmers," Sustainability, MDPI, Open Access Journal, vol. 10(12), pages 1-15, November.

    More about this item

    Keywords

    Stochastic frontier analysis; Semi-varying coefficient model; China's agricultural production and productivity; Rural reforms; Multi-segment industry;

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
    • C5 - Mathematical and Quantitative Methods - - Econometric Modeling

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:deveco:v:132:y:2018:i:c:p:18-31. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu). General contact details of provider: http://www.elsevier.com/locate/devec .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.