Technical Efficiency of Bacillus thuringiensis Cotton in China: Results from Household Surveys

Fangbin Qiao and Jikun Huang

Economic Development and Cultural Change, 2020, vol. 68, issue 3, 947 - 963

Abstract: Studies have well documented the significant economic benefits of Bacillus thuringiensis (Bt) cotton; however, little effort has been made to understand the technical efficiency (TE) of Bt cotton adoption and its dynamics in the long run. Thus, this study analyzes both phenomena using seven waves of unique panel data collected in China for 1999–2012. The results confirm the significantly higher productivity of Bt cotton compared with that of non-Bt cotton. In addition, they highlight that the TE of Bt cotton is lower than that of non-Bt cotton, as the former is a new technology. Nevertheless, this study dynamically shows that the TE of Bt cotton increases in the long term and approaches that of non-Bt cotton. Further, Chinese adopters of Bt cotton were able to reach the frontier of this new technology at a later stage of adoption. Finally, the findings indicate that this increase in TE is affected not only by adopters’ planting experience but also by the diffusion of the new technology within their community. The paper concludes with several policy implications.

Date: 2020
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