Mechanization's impact on agricultural total factor productivity

Abstract

Agricultural mechanisation is rapidly increasing in China and will have an increasing impact on agricultural total factor productivity (TFP) in the future. This study uses panel data from 27 provinces in China, spanning the years 2001‒2020, to measure agricultural TFP, and estimates the effects of mechanisation on TFP, technical efficiency, and technological progress. The results reveal that the level of agricultural mechanisation can promote TFP. TFP has a cumulative effect in the previous period, which can also significantly affect TFP in the current period. The level of agricultural mechanisation improves technical efficiency and promotes technological progress, but this is not statistically significant. Regional heterogeneity exists in mechanisation's effect on agricultural TFP, with the largest effect occurring in the group with the lowest TFP. Therefore, efforts to promote the use of agricultural machinery should increase. China's agricultural machinery subsidy policy must be further adjusted, and agricultural machinery research investments increased, while the government must address the heterogeneity between regions and focus on developing agricultural mechanisation in the central and western regions.

Keywords

• agriculture
• agricultural development
• machine
• rate of production
• technical efficiency
• technological progress