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The Relationship between Farm Size and Productivity in Agriculture: Evidence from Maize Production in Northern China

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  • Yu Sheng
  • Jiping Ding
  • Jikun Huang

Abstract

The relationship between farm size and productivity has long been a topic of debate in development economics. Using farm-level panel data from 2003 to 2013, we investigate the relationship between maize yield and farm size in Northern China. After controlling for farm-specific characteristics, we restore a mild U-shaped relationship between maize yield and cropping area from the apparent inverse U-shaped curve. This suggests that an inverse farm size–productivity relationship persists for most small-sized farms. Further analyses demonstrate that farmer input choice between labor and capital is likely to smooth the non-linear farm size–productivity relationship, with capital use being more likely to affect the farm size–productivity relationship at a larger scale. The findings imply that subsidizing farmers to rent land without helping them become better-equipped could result in resource misallocation towards larger farms using less-efficient labor-intensive technologies.

Suggested Citation

  • Yu Sheng & Jiping Ding & Jikun Huang, 2019. "The Relationship between Farm Size and Productivity in Agriculture: Evidence from Maize Production in Northern China," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 101(3), pages 790-806.
  • Handle: RePEc:oup:ajagec:v:101:y:2019:i:3:p:790-806.
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    File URL: http://hdl.handle.net/10.1093/ajae/aay104
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