The non-linear effect of agricultural insurance on agricultural green competitiveness

ABSTRACT

Increasing agricultural productivity and reducing carbon emissions are two major challenges that China faces. This paper explores how agricultural insurance affects agricultural green total factor productivity (AGTFP) that addresses these two challenges. First, we adopt DDF-GML to measure AGTFP, and the Dagum’s Gini decompositions results show the large differences in AGTFP, with transvariation between subregions contributing the most. Second, we find the U-shaped effect of agricultural insurance on AGTFP in a large country context. The result remains robust after adjusting for time, sample and estimation method of AGTFP. We also construct instrumental variables from the minimum distance from the centroid of counties within a province to the 45 ports in China and two-stage lagged agricultural insurance penetration (AIP) for AIP, and their squares as instrumental variables for AIP². The conclusion remains robust in 2SLS model. Third, the findings confirm three channels for agricultural insurance to influence the AGTFP: environmentally friendly production, labor inputs and operation scale. We further propose policy advice to promote China’s agricultural modernization and point out further research directions in this field.

KEYWORDS:

• Agricultural insurance
• agricultural green total factor productivity
• non-linear effect
• DDF-GML index

Disclosure statement

No potential conflict of interest was reported by the author(s).

Data availability statement

The data that support the findings of this study are available from the corresponding author upon reasonable request.

Correction Statement

This article has been republished with minor changes. These changes do not impact the academic content of the article.

Additional information

Funding

The study was supported by the National Natural Science Foundation of China [grant number 72103169]; The Ministry of Education of Humanities and Social Science Project [grant number 20XJC790004; 21XJC790006]; Shenzhen Philosophy and Social Science Planning Project [SZ2021C003]; Wuhan Science and Technology Innovation Think Tank Construction Research Project [WHKX202204].

Notes on contributors

Fei Lu

Fei Lu is an Assistant Professor of West Institute for Economic Research at Southwestern University of Finance and Economics. His research interests focus on regional economics and industrial economics, especially technology analysis. His research work has been published in such journals as Finance & Trade Economics (in Chinese), Technology Analysis & Strategic Management, Journal of Urban Planning and Development. Contact with him can email to [email protected].

Wuwei Wang

Wuwei Wang is an Associate Professor of West Institute for Economic Research at Southwestern University of Finance and Economics. His research interests include forecasting economics and agricultural economics.

Minghui Liu

Minghui Liu is an Assistant Professor of School of Marxism at Sichuan Agricultural University. Her research covers topics related to agricultural economics and political economy. She has published one book and many research papers.

Mei Liu

Mei Liu is an Assistant Professor of School of Finance and Economics at Jiangsu University. Her research interests focus on regional economics.

Dingyi Qi

Dingyi Qi is a high School student at The Hotchkiss School.