The inhibitory effect of agricultural fiscal expenditure on agricultural green total factor productivity

Abstract

Sustainable development of agriculture is the basis for achieving social sustainable development. As the basic industry of national economy, green development of agriculture has become an important support for building an environment-friendly society. Agricultural fiscal expenditure is a direct channel for the government to support agriculture and promote agricultural transformation. It is important to analyze the impact of agricultural fiscal expenditure (AFE) on agricultural green total factor productivity (AGTFP) for sustainable agricultural development. Therefore, this paper employs the random effect model and spatial Durbin model to empirically analyze the direct effect and spatial spillover effect of AFE on AGTFP by using the agricultural panel data of 30 provinces in China from 2008 to 2020. Then, by taking the policy proposal as the time node, this paper also conducts a time heterogeneity analysis to measure the impact of policy enactment on AFE and AGTFP. The main conclusions are as follows: (1) AGTFP exists significant positive spatial spillover effect. The "radiation effect" of agricultural green development is significant. (2) AFE can significantly reduce the AGTFP in the local area, that is, 1% increase of AFE in the local area will reduce AGTFP by 0.037%. At present, agriculture is still yield-oriented. The improvement of AFE in the local area will lead to the expansion of local agricultural production and increase pollution emission. (3) AFE has a significant negative spatial spillover effect on AGTFP, that is, for every 1% increase in AFE, the AGTFP will decrease 0.123% in geographically similar areas, while the AGTFP will decrease by 0.116% in economically and geographically similar areas. It is obvious that AFE will promote the optimization of agricultural production conditions in the province, with the "demonstration effect" on the surrounding areas, the enthusiasm of production in the surrounding areas will increase, thus expanding the pollution emission. (4) According to the analysis of different periods, AFE has a negative impact on AGTFP mainly before the reform innovation is proposed in 2015. It indicates that reform policies have a significant impact on agricultural sustainability.