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Can Digital Finance Improve China’s Agricultural Green Total Factor Productivity?

Author

Listed:
  • Huiquan Li

    (School of Business Administration, South China University of Technology, Guangzhou 510641, China
    These authors contributed equally to this work.)

  • Qingning Lin

    (Institute of Agricultural Economics and Development, Chinese Academy of Agricultural Sciences, Beijing 100081, China
    These authors contributed equally to this work.)

  • Yan Wang

    (Business School, Qingdao University of Technology, Qingdao 266520, China)

  • Shiping Mao

    (Institute of Agricultural Economics and Development, Chinese Academy of Agricultural Sciences, Beijing 100081, China)

Abstract

The improvement of agricultural green total factor productivity (AGTFP) is crucial to achieve sustainable agricultural development. By matching China’s provincial digital financial inclusion index and agricultural production data from 2011 to 2020, and on the basis of using the DEA–Malmquist productivity index to measure AGTFP, the fixed effect model and Mesomeric effect model are used to empirically test the impact and mechanism of digital financial development on China’s AGTFP. Our research found that from 2011 to 2020, China experienced consistent improvement in AGTFP, which was largely attributed to advancements in technology. Interestingly, the AGTFP in non-major grain-producing areas surpassed that in major grain producing areas. Additionally, digital finance has proven to be an effective tool in boosting China’s AGTFP, the coverage subdimension, the depth of use subdimension and the digitization subdimension all significantly promote the AGTFP. Digital finance can significantly promote the efficiency and progress of agricultural green technology, which shows that digital finance promotes AGTFP in a “dual wheel” driven manner. However, the impact of digital finance on agricultural green technology efficiency and progress is more pronounced in major grain-producing areas than in non-major areas. The impact mechanism demonstrates that digital finance has the potential to stimulate AGTFP in two key ways. First, it can improve the mismatch of agricultural production resources; second, it can promote agricultural technology innovation. Therefore, it is necessary to further promote the rapid development of digital finance, optimize the rational allocation of financial resources, and formulate tailored digital finance development strategies to promote green development of agriculture.

Suggested Citation

  • Huiquan Li & Qingning Lin & Yan Wang & Shiping Mao, 2023. "Can Digital Finance Improve China’s Agricultural Green Total Factor Productivity?," Agriculture, MDPI, vol. 13(7), pages 1-19, July.
    • Handle: RePEc:gam:jagris:v:13:y:2023:i:7:p:1429-:d:1197831
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