The impact of place-based policy on agricultural green total factor productivity: Evidence from China

China’s smallholder agriculture boosts output but has led to severe rural ecological degradation, constraining agricultural green total factor productivity (AGTFP). While place-based policies such as the National Modern Agricultural Demonstration Zones (NMADZs) have been introduced to address this challenge, their impact and underlying mechanisms on AGTFP remain insufficiently understood and lack rigorous causal evidence. Using a time-varying difference-in-differences (DID) model on prefecture-level panel data from 2006 to 2020, this study finds that the establishment of NMADZs significantly increased AGTFP by 7.1 %. This improvement is primarily driven by technological progress, large-scale operations, and industrial agglomeration in agriculture. The effects are more pronounced in less-developed and non-major grain-producing regions, highlighting the importance of tailored policy implementation. Moreover, synergistic investments in infrastructure and green finance further amplify the positive impacts of the policy. Overall, the findings underscore the effectiveness of place-based interventions in promoting a green and scale-oriented agricultural transition and emphasize the need for complementary supportive measures to maximize their benefits.