Agricultural Industry Agglomeration and Agricultural Labor Productivity in China: An Empirical Study Based on Data from 275 Cities

Abstract

Agricultural industry agglomeration refers to the farmers whose business focus on certain agricultural products, and organic agglomeration of enterprises in spatial geography, forming a professional and large-scale market organization network. At present, there are few researches to discuss the influence of agricultural industry agglomeration on agricultural labor productivity. Based on the panel data of 275 cities in China from 1999 to 2013, this paper examines the effect of agricultural industry agglomeration on agricultural labor productivity and its mechanism. The research findings are: （1） China’s agricultural industry agglomeration can significantly improve agricultural labor productivity. The increase of agricultural industry agglomeration degree and the difference of agricultural industry agglomeration degree in different regions explain the “rapidity” and “heterogeneity” of agricultural labor productivity improvement respectively. （2） Agricultural industry agglomeration promotes the improvement of agricultural labor productivity through the transmission mechanism of the internal scale economy at the household level, the localization economy at the industrial level and the increasing returns to scale brought by the urbanized economy at the city level. （3） The effect of agricultural industry agglomeration on agricultural labor productivity is greater than that of non-agricultural cities; the effect of agricultural industry agglomeration on agricultural labor productivity in southern cities is greater than that in northern cities. This paper provides a possible way to solve the challenges faced by Chinese agriculture.