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.
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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.
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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.