Can Digital Finance Improve China’s Agricultural Green Total Factor Productivity?

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The improvement of agricultural green total factor productivity (AGTFP) is crucial to achieve sustainable agricultural development. By matching China’s provincial digital financial inclusion index and agricultural production data from 2011 to 2020, and on the basis of using the DEA–Malmquist productivity index to measure AGTFP, the fixed effect model and Mesomeric effect model are used to empirically test the impact and mechanism of digital financial development on China’s AGTFP. Our research found that from 2011 to 2020, China experienced consistent improvement in AGTFP, which was largely attributed to advancements in technology. Interestingly, the AGTFP in non-major grain-producing areas surpassed that in major grain producing areas. Additionally, digital finance has proven to be an effective tool in boosting China’s AGTFP, the coverage subdimension, the depth of use subdimension and the digitization subdimension all significantly promote the AGTFP. Digital finance can significantly promote the efficiency and progress of agricultural green technology, which shows that digital finance promotes AGTFP in a “dual wheel” driven manner. However, the impact of digital finance on agricultural green technology efficiency and progress is more pronounced in major grain-producing areas than in non-major areas. The impact mechanism demonstrates that digital finance has the potential to stimulate AGTFP in two key ways. First, it can improve the mismatch of agricultural production resources; second, it can promote agricultural technology innovation. Therefore, it is necessary to further promote the rapid development of digital finance, optimize the rational allocation of financial resources, and formulate tailored digital finance development strategies to promote green development of agriculture.