Smart Farming Technology, Scale Economies and Carbon Efficiency: Evidence from Chinese Dairy Farms

Xiuyi Shi and Chenyang Liu ()
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Xiuyi Shi: College of Economics and Management, Northeast Forestry University, Harbin 150040, China
Chenyang Liu: Asia-Australia Business College, Liaoning University, Shenyang 110136, China

Agriculture, 2025, vol. 15, issue 21, 1-23

Abstract: Carbon emissions from dairy farms have significantly hindered the advancement of sustainable agriculture, and improving carbon efficiency is a key pathway to mitigate these emissions. As a critical technological innovation, smart farming technology exerts a substantial impact on boosting carbon efficiency in dairy farms. Based on field survey data collected from Chinese dairy farms, this study employs an integrated empirical approach, including endogenous switching regression, two-stage least squares, and propensity score matching, to rigorously evaluate the impact of smart farming technology on economies of scale. A mediation analysis is further conducted to examine the interrelationships among smart farming technology, economies of scale, and carbon efficiency, while the moderating role of government regulation is also empirically tested. The findings reveal three key results: (1) Smart farming technology exerts a direct and positive influence on the economies of scale in dairy farms, with this effect becoming more pronounced as farm size increases. (2) Economies of scale serve as a partial mediator in the relationship between smart farming technology and carbon efficiency. This indicates that smart farming technology not only directly enhances carbon efficiency but also does so indirectly by facilitating the expansion of production scale and reducing unit costs. (3) Government regulation positively moderates this mediating pathway. Specifically, through standardizing production practices, offering policy incentives, and guiding the application of technology, government interventions strengthen the ability of smart farming technology to foster economies of scale. These insights underscore the importance of steering dairy farms toward the adoption of smart farming technologies to simultaneously improve scale efficiency and carbon performance, thereby supporting the transition toward low-carbon and sustainable agricultural development. Finally, this study proposes three policy implications: strengthening institutional support for the adoption of smart farming technologies in dairy production systems, significantly enhancing training programs related to these technologies, and systematically guiding dairy farms toward smart technology adoption to simultaneously improve economies of scale and carbon efficiency.

Keywords: smart farming technology; scale economies; carbon efficiency; government regulation; sustainable agriculture (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: 2025
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