Research on the Influence of Foreign Investment in Chinese Agriculture on Rural Economic Development

Jia Zhibin, Ghosh Abhijit and Liu Meiqian

Research on World Agricultural Economy, 2025, vol. 6, issue 3

Abstract: The issue of agriculture, rural areas, and farmers is a fundamental issue that affects the country's economy and people's livelihood. The economic development of rural areas is one of the priorities of economic and social development, and the issue of the “three rural issues” is receiving increasing attention. This research examines the multifaceted impact of Foreign Direct Investment (FDI) on China's agricultural sector from 2000 to 2020. Employing a mixed-methods approach, including panel data analysis, structural equation modeling, and spatial econometrics, the study investigates FDI's influence on agricultural productivity, rural employment, income distribution, technological innovation, and environmental sustainability. Results indicate that FDI has generally positively affected these aspects, with a 1% increase in FDI associated with a 0.15% rise in agricultural Total Factor Productivity and a 0.3% increase in rural per capita income. However, benefits are unevenly distributed across regions and income groups. FDI significantly boosts agricultural innovation, with a 10% increase linked to a 7.5% rise in patent applications. Environmental impacts are mixed, showing reduced pollution intensity but increased water usage in FDI-intensive areas. The study highlights the need for targeted policies to maximize FDI benefits while addressing regional disparities and environmental concerns.

Keywords: Agricultural; Finance (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:ags:reowae:410376

DOI: 10.22004/ag.econ.410376

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