Marginal revenue of land and total factor productivity in Chinese agriculture: Evidence from spatial analysis

Abstract

This paper attempts to explore the temporal and spatial nature of the marginal revenue of land, total factor productivity (TFP) change and its three components: technical change (TC), technical efficiency change (TEC) and scale efficiency change (SEC) as seen in Chinese agricultural production from 1995 to 1999. Based on county-level data, the study utilized both stochastic frontier and mapping analyses methods. The results show that growth in the marginal revenue of land was diverse across various regions, where most gain occurred in eastern coastal zone, while loss was in Northwest and North China. China has experienced moderate decreases in annual TFP change (-0.26%) with considerable regional variations. Specifically, the administrative intervention in grain production and the deterioration of the agricultural technology diffusion system led to a moderate drop in annual TFP change. County-level mapping analyses took into account interregional variances in TFP and its components. Regarding components of TFP, TEC differences explain the majority of regional dispersions in TFP. As developed areas in China, the Huang-Huai-Hai region and the Beijing-Tianjin-Tangshan economic zone face the challenges of land conversion and grain security amidst the process of urbanization.