Analysis of dynamic relationship between agricultural products circulation service industry and circulation efficiency in less developed regions: based on data from Western China

Abstract

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The market circulation system for agricultural products in less-developed regions lags behind; it fails to meet the requirements for efficient circulation. Therefore, it is crucial to explore the dynamic relationship between the Agricultural Products Circulation (APC) service industry and circulation efficiency. Using panel data from 29 regions in China, the entropy method measured the Development Level (DL) of the APC service industry, while the non-oriented super-efficiency Slacks-Based Measure (SBM) model was employed to assess the APC efficiency. A Panel Vector Autoregressive (PVAR) model was built for estimation. The impulse response function and variance decomposition were utilized to analyze the differences in the DL of the APC service industry, circulation efficiency, and their interaction mechanism across the Western, Central, and Eastern regions of China. The findings indicate that the DL of the APC service industry and APC efficiency in the less-developed regions of the West have a positive driving effect on each other. However, the magnitude of this effect was asymmetric and transient. The APC service industry’s DL and APC efficiency are more dependent on their inertia, and no efficient two-way feedback mechanism has been formed. This study provides a reference for the construction and sustainable development of modernized APC systems in less-developed regions.

Keywords

• agricultural circulation service industry
• circulation efficiency
• interaction mechanism
• smallholder farmers
• Western China