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Research on Fiscal Support for Agriculture, Green Agricultural Productivity, and the Urban–Rural Income Gap: A PVAR Approach

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  • Yanling Lu

    (School of Business, Nanjing University, Nanjing 210008, China)

  • Bo Zhong

    (School of Business, Nanjing University, Nanjing 210008, China)

  • Quan Fang

    (School of Business, Nanjing University, Nanjing 210008, China)

Abstract

To further promote rural revitalization strategies and achieve common prosperity, it is necessary to clarify the relationships among public expenditure for agriculture, agricultural green total factor productivity (AGTFP), and the urban–rural income gap (URIG). On the basis of panel data for 30 provincial regions in China from 2012 to 2022, this study constructs a panel vector autoregression (PVAR) model and explores their mutual interaction and influence from both dynamic and static perspectives through the Granger causality test, impulse response analysis, and variance decomposition methods. The research results show that public expenditure on agriculture, AGTFP, and URIG exhibit significant self-reinforcing trends. There is a significant two-way interaction effect between public expenditure on agriculture and URIG, indicating that these factors promote and complement each other. In addition, both improving AGTFP and increasing public expenditure on agriculture can help narrow URIG, but the positive impact of AGTFP exhibits greater magnitude and sustainability. In conclusion, from a long-term perspective, to develop the rural economy and promote rural revitalization, it is necessary not only to increase public expenditure on agriculture continuously, but also to focus on enhancing AGTFP.

Suggested Citation

  • Yanling Lu & Bo Zhong & Quan Fang, 2025. "Research on Fiscal Support for Agriculture, Green Agricultural Productivity, and the Urban–Rural Income Gap: A PVAR Approach," Sustainability, MDPI, vol. 17(12), pages 1-18, June.
    • Handle: RePEc:gam:jsusta:v:17:y:2025:i:12:p:5443-:d:1678045
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