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China's Rural Industrialization and Agricultural Mechanization

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  • Xin Ma
  • Tao Huang

Abstract

Rural industrialization provides nonfarm employment opportunities and financial support for farmers and may be a non‐negligible cause of agricultural mechanization in China. However, there is a lack of empirical studies on this topic due to challenges in obtaining data and identifying causal relationships. In this paper, we use multiple data sources and construct an instrumental variable based on the number of handicraft production cooperatives in 1957 to test empirically the causal effect of rural industrialization on agricultural mechanization. The results show that rural industrialization contributes significantly and robustly to agricultural mechanization. A 10 percent increase in the average number of industrial enterprises per township was associated with a 1.05 percent increase in the agricultural machinery power per unit area of arable land. Both the demand effect and income effect played crucial roles in the interaction between these two phenomena.

Suggested Citation

  • Xin Ma & Tao Huang, 2023. "China's Rural Industrialization and Agricultural Mechanization," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 31(3), pages 27-58, May.
    • Handle: RePEc:bla:chinae:v:31:y:2023:i:3:p:27-58
    DOI: 10.1111/cwe.12470
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    References listed on IDEAS

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