IDEAS home Printed from https://ideas.repec.org/a/gam/jagris/v15y2025i12p1247-d1674419.html
   My bibliography  Save this article

Modernization and Elasticity of Substitution in China’s Grain Production: Evidence from 1991 to 2023

Author

Listed:
  • Pengju Wang

    (School of Economics, University of Chinese Academy of Social Sciences, Beijing 102488, China)

  • Guanghao Wu

    (Faculty of Applied Economics, University of Chinese Academy of Social Sciences, Beijing 102488, China)

Abstract

The intensive utilization of agricultural inputs is key to agricultural modernization. This study analyzed the elasticity of substitution among inputs in Chinese grain production (1991–2023) using a Translog production function, controlling for price disturbances. The key findings are as follows: (1) Complementary relationships exist between capital–fertilizer, capital–land, fertilizer–land, pesticide–land, and fertilizer–labor, while capital–pesticide, fertilizer–pesticide, pesticide–labor, and land–labor are substitutive. (2) The elasticity of substitution among agricultural inputs stabilizes over time, with substitutive and complementary relationships among most factors weakening after 2004. (3) Eastern and northeastern regions tend to substitute labor with capital more significantly, while central and western regions show a balanced interplay. (4) Nationwide trends in agricultural input shares indicate increasing mechanization, land-use efficiency, fertilizer use, and reduced labor input. These results provide insights for optimizing input allocation and enhancing food security.

Suggested Citation

  • Pengju Wang & Guanghao Wu, 2025. "Modernization and Elasticity of Substitution in China’s Grain Production: Evidence from 1991 to 2023," Agriculture, MDPI, vol. 15(12), pages 1-21, June.
    • Handle: RePEc:gam:jagris:v:15:y:2025:i:12:p:1247-:d:1674419
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2077-0472/15/12/1247/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2077-0472/15/12/1247/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Henningsen, Arne & Henningsen, Géraldine, 2012. "On estimation of the CES production function—Revisited," Economics Letters, Elsevier, vol. 115(1), pages 67-69.
    2. Daron Acemoglu, 1998. "Why Do New Technologies Complement Skills? Directed Technical Change and Wage Inequality," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 113(4), pages 1055-1089.
    3. Jo, Ara & Miftakhova, Alena, 2024. "How constant is constant elasticity of substitution? Endogenous substitution between clean and dirty energy," Journal of Environmental Economics and Management, Elsevier, vol. 125(C).
    4. Zhu, Shu & Xu, Xin & Ren, Xiaojing & Sun, Tianhua & Oxley, Les & Rae, Allan & Ma, Hengyun, 2016. "Modeling technological bias and factor input behavior in China's wheat production sector," Economic Modelling, Elsevier, vol. 53(C), pages 245-253.
    5. Sharma, Subhash C., 1991. "Technological change and elasticities of substitution in Korean agriculture," Journal of Development Economics, Elsevier, vol. 35(1), pages 147-172, January.
    6. David P. Vincent, 1977. "Factor Substitution In Australian Agriculture," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 21(2), pages 119-129, August.
    7. Christensen, Laurits R & Jorgenson, Dale W & Lau, Lawrence J, 1973. "Transcendental Logarithmic Production Frontiers," The Review of Economics and Statistics, MIT Press, vol. 55(1), pages 28-45, February.
    8. Simon Jetté-Nantel & Wuyang Hu & Yumei Liu, 2020. "Economies of scale and mechanization in Chinese corn and wheat production," Applied Economics, Taylor & Francis Journals, vol. 52(25), pages 2751-2765, May.
    9. Debertin, David L. & Pagoulatos, Angelos & Aoun, Abdessalem, 1990. "Impacts of technological change on factor substitution between energy and other inputs within US agriculture, 1950-79," Energy Economics, Elsevier, vol. 12(1), pages 2-10, January.
    10. Wang, Can & Deng, Mengzhi & Deng, Junfeng, 2020. "Factor reallocation and structural transformation implications of grain subsidies in China," Journal of Asian Economics, Elsevier, vol. 71(C).
    11. Zhihao Zheng & Shen Cheng & Shida R. Henneberry, 2023. "Total factor productivity change in China's grain production sector: 1980–2018," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 67(1), pages 38-55, January.
    12. 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.
    13. Rainer Klump & Peter McAdam & Alpo Willman, 2007. "Factor Substitution and Factor-Augmenting Technical Progress in the United States: A Normalized Supply-Side System Approach," The Review of Economics and Statistics, MIT Press, vol. 89(1), pages 183-192, February.
    14. Wayne Thirsk, 1974. "Factor Substitution in Colombian Agriculture," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 56(1), pages 73-84.
    15. Youhong Lee & Qingxiao Li & Metin Çakır, 2023. "Elasticities of substitution between marketing and farm inputs in a complete system of food commodities," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 45(3), pages 1450-1471, September.
    16. Vincent, David P., 1977. "Factor Substitution In Australian Agriculture," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 21(2), pages 1-11, August.
    17. Uri, Noel D., 1988. "Energy substitution in agriculture in the United States," Applied Energy, Elsevier, vol. 31(3), pages 221-237.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. McKay, Lloyd & Lawrence, Denis & Vlastuin, Chris, 1980. "Input Demand and Substitution in the Australian Sheep Industry," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 48(02), pages 1-14, August.
    2. McKay, Lloyd & Lawrence, Denis & Vlastuin, Chris, 1982. "Production Flexibility and Technical Change in Australia's Wheat-Sheep Zone," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 50(01), pages 1-18, April.
    3. Msangi, Siwa & Rosegrant, Mark, 2007. "A Closer Look at the IMPACT of Climate Change on Country-Level Food Security and Nutrition," Conference papers 331635, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    4. Buetre, Benjamin L. & Ahmadi-Esfahani, Fredoun Z., 1993. "Estimation of Factor Demand and Substitution in the Australian Pig Industry: A Dual Approach," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 61(02-01), pages 1-12, August.
    5. Sam Jones, 2020. "Testing the Technology of Human Capital Production: A General‐to‐Restricted Framework," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 82(6), pages 1429-1455, December.
    6. Yumei Liu & Wuyang Hu & Simon Jetté-Nantel & Zhihong Tian, 2014. "The Influence of Labor Price Change on Agricultural Machinery Usage in Chinese Agriculture," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 62(2), pages 219-243, June.
    7. Trenczek, Jan & Wacker, Konstantin M., 2023. "Human Capital Misallocation and Output per Worker Differences: Beyond Cobb-Douglas," GLO Discussion Paper Series 1331, Global Labor Organization (GLO).
    8. Esteban Aucejo & Jonathan James, 2021. "The Path to College Education: The Role of Math and Verbal Skills," Journal of Political Economy, University of Chicago Press, vol. 129(10), pages 2905-2946.
    9. Alberto Behar, 2005. "Does training benefit those who do not get any? Elasticities of complementarity and factor price in South Africa," Economics Series Working Papers 244, University of Oxford, Department of Economics.
    10. Hossein Mirshojaeian Hosseini & Shinji Kaneko, 2013. "Fuel Conservation Effect of Energy Subsidy Reform in Iran," Working Papers 3-1, Faculty of Economics,University of Tehran.Tehran,Iran.
    11. Koetse, Mark J. & de Groot, Henri L.F. & Florax, Raymond J.G.M., 2008. "Capital-energy substitution and shifts in factor demand: A meta-analysis," Energy Economics, Elsevier, vol. 30(5), pages 2236-2251, September.
    12. Bibhudutta Panda, 2017. "Schooling and productivity growth: evidence from a dual growth accounting application to U.S. states," Journal of Productivity Analysis, Springer, vol. 48(2), pages 193-221, December.
    13. Gregory Casey & Ryo Horii, 2019. "A Multi-factor Uzawa Growth Theorem and Endogenous Capital-Augmenting Technological Change," ISER Discussion Paper 1051, Institute of Social and Economic Research, The University of Osaka.
    14. Piva, Mariacristina & Santarelli, Enrico & Vivarelli, Marco, 2005. "The skill bias effect of technological and organisational change: Evidence and policy implications," Research Policy, Elsevier, vol. 34(2), pages 141-157, March.
    15. Mirshojaeian Hosseini , Hossein & Majed , Vahid & Kaneko , Shinji, 2015. "The Effects of Energy Subsidy Reform on Fuel Demand in Iran," Journal of Money and Economy, Monetary and Banking Research Institute, Central Bank of the Islamic Republic of Iran, vol. 10(2), pages 23-47, January.
    16. Kölling, Arnd & Schank, Thorsten, 2002. "Skill-biased technological change, international trade and the wage structure," Discussion Papers 14, Friedrich-Alexander University Erlangen-Nuremberg, Chair of Labour and Regional Economics.
    17. Du, Junhong & He, Jiajia & Yang, Jing & Chen, Xiaohong, 2024. "How industrial robots affect labor income share in task model: Evidence from Chinese A-share listed companies," Technological Forecasting and Social Change, Elsevier, vol. 208(C).
    18. Karanfil, Fatih & Yeddir-Tamsamani, Yasser, 2010. "Is technological change biased toward energy? A multi-sectoral analysis for the French economy," Energy Policy, Elsevier, vol. 38(4), pages 1842-1850, April.
    19. Zha, Donglan & Kavuri, Anil Savio & Si, Songjian, 2018. "Energy-biased technical change in the Chinese industrial sector with CES production functions," Energy, Elsevier, vol. 148(C), pages 896-903.
    20. Growiec, Jakub & Mućk, Jakub, 2020. "Isoelastic Elasticity Of Substitution Production Functions," Macroeconomic Dynamics, Cambridge University Press, vol. 24(7), pages 1597-1634, October.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    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:gam:jagris:v:15:y:2025:i:12:p:1247-:d:1674419. See general information about how to correct material in RePEc.

    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 bibliographic 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.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.