Does Outsourcing Service Reduce the Excessive Use of Chemical Fertilizers in Rural China? The Moderating Effects of Farm Size and Plot Size

Bowei Li, Yanjun Qian and Fanbin Kong ()
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Bowei Li: Zhejiang Province Key Think Tank, Institute of Ecological Civilization, Zhejiang A&F University, Hangzhou 311300, China
Yanjun Qian: College of Economics and Management, Zhejiang A&F University, Hangzhou 311300, China
Fanbin Kong: Zhejiang Province Key Think Tank, Institute of Ecological Civilization, Zhejiang A&F University, Hangzhou 311300, China

Agriculture, 2023, vol. 13, issue 10, 1-18

Abstract: The excessive use of chemical fertilizers (OCF) is one of China’s main sources of agricultural nonpoint source pollution. It is debatable whether outsourcing service adoption (FOS) reduces OCF. This article argues that farm size and plot size can moderate the effectiveness of FOS in reducing OCF. Particularly, organizations earn more profits when they provide outsourcing services to large-sized farms and plots, thereby preventing their opportunistic behavior and reducing the OCF. Based on the survey data of wheat growers from six major grain-producing counties in Anhui Province, China, the Cobb–Douglas production function is used to measure the OCF, and ordinary least squares (OLS) estimation is used as a benchmark. In addition, propensity score matching (PSM) is used to eliminate the selection bias, and two-stage least squares estimation (IV-2sls) is used to eliminate endogeneity. The results indicate that approximately 90% of the sampled households used excessive fertilizers, signifying that the excessive use of chemical fertilizers in China’s agricultural production remains a serious problem. FOS reduces the OCF on large farms and plots. However, the effectiveness of FOS in reducing OCF disappeared when it was provided to small farms and plots. Extending FOS and organizing efficient land transfers should receive equal consideration from policymakers.

Keywords: outsourcing service adoption; excessive use of chemical fertilizers; labor division; farm size; plot size; and moderating effects (search for similar items in EconPapers)
JEL-codes: Q1 Q10 Q11 Q12 Q13 Q14 Q15 Q16 Q17 Q18 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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