Does fiscal expenditure promote green agricultural productivity gains: An investigation on corn production

Abstract

Promoting green and low-carbon development in agriculture is the key to achieving high-quality development, in which financial expenditure on agriculture is an essential means to support its green development. This study first estimates the green productivity of twenty corn-growing provinces by the by-production model with Luenberger total factor productivity indicator in China from 2004 to 2018. Then the impact of fiscal spending on its green productivity growth and its mechanism are investigated by the econometric models. The results show that the average green total factor productivity indicator of China's twenty corn-growing provinces from 2004 to 2018 is 2.54%. The share of fiscal expenditure stock in agricultural output has a positive but insignificant direct impact on green productivity, whereas it significantly influences corn GTFP mainly through enhancing rural infrastructure. The share of fiscal expenditure stock has a larger effect on the green productivity in small corn-growing provinces. The findings suggest that the government should provide financial support suitable for local agricultural development.