How Off‐Farm Employment Affects Technical Efficiency of China's Farms: The Case of Jiangsu

15 Pages Posted: 18 May 2016

See all articles by Linxiu Zhang

Linxiu Zhang

Chinese Academy of Sciences - Center for Chinese Agricultural Policy

Weiliang Su

Chinese Academy of Sciences (CAS) - Institute of Geographic Sciences and Natural Resources Research (IGSNRR)

Tor Eriksson

Aarhus University - Department of Economics

Chengfang Liu

Peking University

Date Written: May–June 2016

Abstract

Using three‐wave survey data for four villages of Jiangsu Province in China, the present paper examines whether and to what extent off‐farm employment affects the technical efficiency of agricultural production. The level of technical efficiency is measured using a stochastic frontier production function approach. Based on estimation results from instrumental variable panel quantile regressions we find that there is a positive significant effect of off‐farm employment on the level of farm technical efficiency. We also find that fragmentation of farmland is a barrier to the improvement of technical efficiency. In addition, we find a downward trend in the level of agricultural technical efficiency among our sample. Therefore, the Chinese Government should stimulate agricultural mechanization and the development of farming techniques to improve technical efficiency in the context of increasing off‐farm employment.

Keywords: off‐farm employment, stochastic frontier analysis, technical efficiency

JEL Classification: O12, Q13, Q16

Suggested Citation

Zhang, Linxiu and Su, Weiliang and Eriksson, Tor and Liu, Chengfang, How Off‐Farm Employment Affects Technical Efficiency of China's Farms: The Case of Jiangsu (May–June 2016). China & World Economy, Vol. 24, Issue 3, pp. 37-51, 2016, Available at SSRN: https://ssrn.com/abstract=2781274 or http://dx.doi.org/10.1111/cwe.12157

Linxiu Zhang (Contact Author)

Chinese Academy of Sciences - Center for Chinese Agricultural Policy ( email )

Anwai, Beijing, 100101
China

Weiliang Su

Chinese Academy of Sciences (CAS) - Institute of Geographic Sciences and Natural Resources Research (IGSNRR) ( email )

Beijing
China

Tor Eriksson

Aarhus University - Department of Economics ( email )

Fuglesangs Allé 4
Aarhus, 8210
Denmark
45 87164978 (Phone)

Chengfang Liu

Peking University ( email )

No. 38 Xueyuan Road
Haidian District
Beijing, Beijing 100871
China

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