Mechanization services, factor allocation, and farm efficiency: Evidence from China

Meili Huan, Fengxia Dong and Liang Chi

Review of Development Economics, 2022, vol. 26, issue 3, 1618-1639

Abstract: The relationship between mechanization services and farm efficiency remains a debate in agricultural production. To empirically test the effects of farmers' mechanization service use on farm efficiency, we formulate a stochastic frontier (SF) model and a mediating effect model. We apply our analysis to a survey data set with 1,385 farm‐level samples collected in 13 major maize‐producing provinces in China in 2018. To address the endogenous mechanization service adoption in the SF model, a probit model is estimated. In the mediation model, two factor allocation, including agricultural investment and crop structure, is examined. Our study shows that current labor migration encouraged the adoption of mechanization services, and larger farms were more likely to use mechanization services. Moreover, our study shows that the effect of mechanization services on farm efficiency is significantly positive and is mediated by factor allocation.

Date: 2022
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