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Impact Assessment of Growth Drag and Its Contribution Factors: Evidence from China’s Agricultural Economy

Mengzhen Zhao (), Zhenhua Chen (), Hailing Zhang () and Junbo Xue ()
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Mengzhen Zhao: Institute of Science and Development, Chinese Academy of Sciences, Beijing 100190, China
Zhenhua Chen: City and Regional Planning, Knowlton School of Architecture, The Ohio State University, 275 West Woodruff Avenue, Columbus, OH 43210, USA
Hailing Zhang: State Key Joint Laboratory of Environment Simulation and Pollution Control (SKLESPC), School of Environment, Tsinghua University, Beijing 100084, China
Junbo Xue: Institute of Science and Development, Chinese Academy of Sciences, Beijing 100190, China

Sustainability, 2018, vol. 10, issue 9, 1-15

Abstract: The sustainable development of agriculture is important for China, where more than 20 percent of the world population live. Many factors affect the sustainable development of agriculture in China. The purpose of this paper is to find out what factors play influential roles on affecting the growth pattern. Based on a modified production function model built upon Slow (1956) and Romer (2001), the impact of growth drag on the agricultural economy, and the contribution resources, are evaluated empirically using a time-series regression analysis based on the case of China for the period 1978–2015. The estimated coefficient of the total agricultural growth drag in China is 1.32, which suggests that the annual agricultural growth is associated with a 1.32 percent decline due to the scarcities of land, water, and energy. Specifically, the growth drags from land, water, and energy are found to be 0.5 percent, 0.44 percent, and 0.38 percent, respectively. Additionally, the results suggest that capital is the most important factor in the agricultural sector, although agriculture is highly dependent on land. Capital contributes around 76.86 percent to the growth of the agricultural economy, whereas contributions from land, energy, water, and technological progress are relatively small. Therefore, more investment should be added to agriculture, to accelerate the technology progress. Furthermore, the saving of water and energy is also important for the sustainable development of agriculture.

Keywords: growth drag; water resource; land resource; energy resource; technological progress (search for similar items in EconPapers)
JEL-codes: Q Q0 Q2 Q3 Q5 Q56 O13 (search for similar items in EconPapers)
Date: 2018
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