Economics at your fingertips  

The interplay of production commercialisation and specialization: An empirical study on Chinese smallholders

Lihua Li, Maria Estela Varua, Adam M. Komarek, Sriram Shankar and William D. Bellotti

China Agricultural Economic Review, 2017, vol. 9, issue 4, 504-521

Abstract: Purpose - The purpose of this paper is to explore the endogenous relationship between production specialisation and market commercialisation with an empirical study of farmers in Northwest China. Design/methodology/approach - The three-stage least squares were used to address simultaneity and over-identification problems in comparison with two-stage least squares (2SLS). The Durbin-Wu-Hausman test was employed to identify the endogeneity of the commercialisation and specialisation variables. The validity, relevance, and strength of the instruments were tested using the Stock-Yogo weak instrument diagnostics test. Findings - A two-way interrelationship between specialisation and commercialisation were confirmed, and suggest that farmers’ decisions on farm commercialisation and production specialisation are actually separate and interacting. Social implications - By demonstrating that a virtuous cycle exists between agricultural commercialisation and on-farm specialisation, policies can be formulated to complement these two effects that may help increase small holders’ income. Farmers’ market participation can be indirectly improved by combining market improvement and risk management tools to encourage production specialisation. Originality/value - The insights of this study cast further light onto the farm market participation theory by emphasising that higher asset endowments enable small farmers to specialise in production with comparative advantage.

Keywords: China; Commercialisation; Smallholders; Specialisation; Interplay (search for similar items in EconPapers)
Date: 2017
References: Add references at CitEc
Citations: Track citations by RSS feed

Downloads: (external link) ... RePEc&WT.mc_id=RePEc (text/html)
Access to full text is restricted to subscribers

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Ordering information: This journal article can be ordered from
Emerald Group Publishing, Howard House, Wagon Lane, Bingley, BD16 1WA, UK

Access Statistics for this article

China Agricultural Economic Review is currently edited by Professor Xian Xin

More articles in China Agricultural Economic Review from Emerald Group Publishing
Bibliographic data for series maintained by Virginia Chapman ().

Page updated 2021-02-23
Handle: RePEc:eme:caerpp:caer-08-2016-0122