National water-saving city and its impact on agricultural total factor productivity: A case study of nine provinces along the Yellow River, China

Abstract

As an important water-saving regulation, the construction of national water-saving city (NWSC) plays an important role in agricultural production, however, there is little research on its impact on agriculture. This paper uses super efficient Slacks-Based Measure (SBM) to measure agricultural total factor productivity (ATFP) in the regions along the Yellow River, and uses difference-in-difference (DID) model to explore the impact of NWSC on ATFP based on the theory of production factor flow. The results show that: First, the ATFP in the regions along the Yellow River demonstrated an initial increase followed by a decrease from 2000 to 2019, the ATFP in the regions along the Yellow River is low in the north and high in the south, and the ATFP of the main grain producing areas is generally higher. Second, the establishment of the NWSC can effectively improve the ATFP, the ATFP has increased by 6.57% compared with the control group, and the dynamic effect of the policy has shown an “N" pattern since its implementation. Particularly, in areas with relatively poor water resources, high agricultural factor intensification and major grain production areas, NWSC has a stronger impact on the ATFP. Third, NWSC has promoted the flow of labor production factors and improved ATFP through income effect, industrial synergy effect and technological innovation effect. The transfer of agricultural labor has also injected strong impetus into industrial development, and improved the return on industrial capital, which can promote agricultural capital more significantly, and further improved ATFP. Our findings provide empirical evidence for achieving high-quality agricultural development through the construction of NWSC.