Impact of demonstration zone policy on agricultural science and technology innovation: evidence from China

Abstract

As driving forces in agricultural development, science and technology, along with innovation in agricultural science and technology, are crucial to food security and socioeconomic development. The National Modern Agricultural Demonstration Zone is a major initiative of the Chinese government to promote the modernization of agriculture with Chinese characteristics and aims to improve the level of regional agricultural development through policy guidance and financial support. However, few studies have explored the impact of the National Modern Agricultural Demonstration Zone on agricultural science and technology innovation from a policy perspective. In this context, this study is based on the panel data of 696 regions in China from 2007 to 2017. Difference-in-differences is used to study the impact and mechanism of the National Modern Agricultural Demonstration Zone on agricultural science and technology innovation. The results show that the National Modern Agricultural Demonstration Zone policy can significantly improve the level of agricultural science and technology innovation, and the impact effect is more significant in regions with high fiscal autonomy, western regions, and those with better transportation infrastructure. Mechanism analysis shows that the National Modern Agricultural Demonstration Zone enhances agricultural science and technology innovation mainly through increasing financial resource allocation, improving financial support for agriculture, and increasing human capital. This study evaluates the policy effects, provides theoretical support for the public value of the National Modern Agricultural Demonstration Zone, and offers lessons for agricultural science and technology innovation in similar economies in China and worldwide.