Agricultural reforms and production in China: Changes in provincial production function and productivity in 1978–2015

• DOI: 10.1016/j.jdeveco.2017.12.005
• Publication Date: 2017-12-23T19:10:56Z
• Authors: Binlei Gong
• Keywords: 2. Zero hunger; 8. Economic growth; 0502 economics and business; 05 social sciences; 1. No poverty; 15. Life on land

Abstract A series of fundamental and market-oriented reforms since 1978 have dramatically reshaped China's agricultural sector, which had been sluggish during the socialist period. Besides productivity growth and efficiency changes, the shape of the production function may also transform rapidly over time. Moreover, the four segments in agriculture (farming, forestry, animal husbandry, and fisheries) have different production processes and techniques, so the aggregated production function of agriculture may vary across provinces. Compared with existing studies, which usually assume a fixed production function, this paper allows a varying coefficient production function that can better capture the structure change in the six reform periods over the past four decades. The empirical results show that the labor elasticity is decreasing, the fertilizer and machinery elasticities are increasing, and the land elasticity has a U-shaped curve across time. Moreover, technology and inputs are leading the growth alternatively in different reform periods.