Can Policy Promote Agricultural Service Outsourcing? Quasi-Natural Experimental Evidence from China

Xiang Li and Xiaoqin Guo ()
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Xiang Li: School of Business, Heze University, Heze 274015, China
Xiaoqin Guo: College of Politics and Law, Heze University, Heze 274015, China

Sustainability, 2023, vol. 15, issue 2, 1-18

Abstract: This paper emphasizes the key role of policy in the development of agricultural services outsourcing. In this paper, a theoretical framework is constructed to analyze the role of government policies on agricultural service outsourcing under the assumption of the separability of agricultural production processes. The article constructs a quasi-natural experiment using the China-targeted poverty alleviation program and nationally representative microdata, and the PSM-DID model is chosen to estimate the policy effects. We also discuss regional heterogeneity, aiming to identify the ways in which policy affects agricultural service outsourcing. Based on a comprehensive household-level dataset and econometric analysis, we find that targeted poverty alleviation programs significantly promote the use of agricultural service outsourcing by low-income farmers, and the effects of the policies are more pronounced for the central and western regions. These findings suggest that targeted poverty alleviation programs improve the income of farm households in poor areas and encourage the use of agricultural service outsourcing, which can save agricultural labor, reduce the opportunity cost of agricultural production, and contribute to the sustainable development of the poor.

Keywords: targeted poverty alleviation program; agricultural service outsourcing; China; PSM-DID; CFPS (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2023
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