4.1. Econometric Models and Research Methods
Coe and Helpman (1995) [
37] proposed that the change in a country’s TFP in an open economy is influenced by the stock of domestic R&D intellectual capital on the one hand and related to the stock of international R&D intellectual capital on the other; they accordingly proposed a model as follows:
In Equation (9), Fi represents TFP, Sid represents domestic R&D intellectual capital, and Sif represents international R&D intellectual capital spillover. The above international R&D knowledge-spillover model has become a standard paradigm for academics to explore technology spillover effects. This paper extends the model by introducing international trade in agricultural products, foreign direct investment in agriculture, agricultural technology input, agricultural human capital, rural affluence, environmental regulation, and agricultural industry structure to examine the factors influencing green TFP in agriculture.
International Trade in Agricultural Products. The impact of international trade in agricultural products on agricultural green TFP is a combination of the TFP effect and an environmental effect. Agricultural trade may affect agricultural TFP through technology spillovers and may affect the environment through structural, technological, and scale effects. The above effects play a dominant role in determining the direction of the impact of agricultural trade on agricultural green TFP. Thus, the direction of the agricultural trade on green agricultural TFP needs to be further verified.
Foreign direct investment in agriculture. On the one hand, agricultural FDI hinders agricultural TFP due to its competitive effect. On the other hand, regarding the analysis of the environmental effects of foreign direct investment in agriculture, according to the pollution paradise hypothesis, the stringent environmental regulations in developed countries may also force some heavily polluting enterprises and industries to shift their production abroad, putting pressure on the local environment. Therefore, this paper assumes a negative effect of agricultural FDI on agricultural green TFP.
Agricultural technology inputs. According to endogenous growth theory, R&D innovation drives productivity. Green technologies can boost productivity and reduce pollution. Thus, this paper expects a positive effect of agricultural technology inputs on agricultural green TFP.
Agricultural human capital. The increase in the level of human capital significantly raises the level of agricultural TFP. An increase in education is conducive to raising environmental awareness and enforcing appropriate environmental regulations. Therefore, this paper assumes that higher levels of human capital have a positive effect on green TFP in agriculture.
Rural affluence. The level of rural affluence is closely related to the choice of agricultural production methods, the promotion and application of agricultural technologies, and the improvement of agricultural production efficiency. As the per capita income level of farmers increases, people’s awareness of environmental protection and environmental regulations increases, accompanied by a reduction in agricultural surface source pollution emissions. Based on the above analysis, this paper expects a positive effect of rural affluence on agricultural green TFP.
Environmental Regulation. The traditional neoclassical economic view argues that in the short run, the implementation of environmental regulations increases the cost of pollution control and has a “crowding-out effect” on other profitable investments, i.e., the “compliance-cost” effect of environmental regulations, thus negatively affecting green total factor productivity. [
38]. The modified view represented by Porter et al. (1995) [
39] takes a dynamic perspective, arguing that appropriate environmental regulations can encourage producers to adopt cleaner production technologies in the long run, optimize factor allocation efficiency, partially or even fully offset their “compliance costs”, and achieve the dual goals of economic growth and environmental protection. This is the “innovation-compensation” effect of environmental regulation. From a dynamic point of view, after a certain period of development, the “innovation-compensation” effect of environmental regulations on green TFP in agriculture will gradually offset the negative impact of the “compliance-cost” effect. In terms of the “innovation-compensation” effect, an increase in the intensity of environmental regulations encourages agricultural producers to apply green production technologies and improve green total factor productivity in agriculture by increasing the value added of agricultural products and reducing agricultural pollution emissions. In this paper, we expect that the effect of environmental regulations on green TFP in agriculture may show a nonlinear effect.
Agricultural industry structure. Industries have differ in resource consumption and pollutant emission intensity. When the proportion of resource-consuming and pollution-intensive industries in the agricultural industry increases or the development rate accelerates, pollution emissions intensify; conversely, when the proportion of such industries in the agricultural industry decreases or the development rate slows, pollution is reduced. Therefore, this paper expects that the rising share of livestock farming in the agricultural industry structure has a hindering effect on the growth of green TFP in agriculture.
Changes in economic factors are often influenced by past behavior patterns. The efficiency of green TFP in agriculture in the one period will have a persistent effect on the next period. Therefore, we constructed a dynamic panel model, which introduces a lagged variable of green TFP to obtain more effective estimation results. This paper draws on previous research to form a model based on the above analysis.
In Equation (10), GTFPit represents the agricultural green TFP for each province by year, Tradeit represents the scale of international trade in agricultural products, FDIit represents the amount of foreign direct investment in agriculture, Tit represents the level of agricultural technology inputs, HCit represents the level of human capital, Incit represents the level of rural affluence, Erit represents environmental regulation, and Strit represents the structure of the agricultural industry.
4.3. Empirical Testing and Analysis
Since all changes in economic factors have a certain inertia, the current behavior of individuals often depends on their past behavior patterns, and the change and improvement of agricultural green TFP is a continuous dynamic process. Therefore, this paper constructs a dynamic panel model and introduces a lagged variable of green TFP to obtain more effective estimation results, adopting the generalized method of moments (GMM) estimation method to verify the result. The systematic GMM model and differential GMM model were used to analyze the factors influencing agricultural productivity in China from the perspective of environmental constraints, and the results are shown in
Table 7. All variables in
Table 7 are taken as logarithms.
According to the estimation results of the differential GMM model and the systematic GMM model for the dynamic panel, the Sargan test value is 1, so the original hypothesis of “all instrumental variables are valid” cannot be rejected. The AR(1) and AR(2) tests for the differential GMM are 0.002 and 0.586, respectively, and the AR(1) and AR(2) tests for the systematic GMM are 0.001 and 0.101, respectively, indicating that there is no first- or second-order autocorrelation in the difference of the disturbance terms. This shows that the dynamic panel model setting is reasonable.
From the regression results, it is clear that the first-order lagged term of agricultural green TFP, international trade in agricultural products, foreign direct investment in agriculture, agricultural technology input, and environmental governance have significant effects on agricultural green TFP. The effects of agricultural human capital and agricultural industry structure on agricultural green TFP are uncertain across models, while there is no significant effect of rural affluence on agricultural green TFP. Compared with the weak instrumental variability of the differential GMM, the results of the systematic GMM are more robust and were analyzed as follows.
For every 1% increase in agricultural green TFP in the previous period, agricultural green TFP increased by 0.78%. This indicates that the effect of agricultural green TFP in the previous period on agricultural green TFP in the current period is significant, which is in line with the reality. Agricultural productivity growth is influenced by production inputs and technological advances in the previous period, whereas in agricultural production, some factors, such as costs and prior-period emissions, have a persistent impact on the later period. Thus, the growth of green TFP in agriculture is also dynamic process.
International trade in agricultural products increases agricultural green TFP. Every 1% increase in the scale of agricultural trade increases agricultural green TFP by 0.08%. The demonstration effect, scale effect, learning effect, and industry chain effect of agricultural trade are stronger than the market and resource-crowding effects, driving the improvement of green TFP in agriculture. Chinese agricultural exports are repeatedly restricted by the green barriers of developed countries, which will force Chinese agriculture to change the current development model, improve the level of green agricultural development, and promote the application of agricultural technology. The import of agricultural products can also stimulate local competitors to imitate advanced technology. Imported agricultural products containing advanced cultivation methods and management experience produce a demonstration effect on domestic producers. The pressure of import-induced international market competition can also motivate domestic producers to learn and innovate, which is conducive to the development of domestic agriculture. However, we did not investigate how specific exports and imports in international trade of agricultural products affect agricultural green TFP, which should be addressed in future studies.
Agricultural FDI suppresses agricultural green TFP. For every 1% increase in agricultural FDI, agricultural green TFP decreases by 0.03%. Since the reform and opening up, the Chinese government has been encouraging foreign direct investment in the agricultural sector, with a view to injecting new vitality into agriculture and spreading advanced technology, production methods, and management concepts. It has been argued that FDI can raise the technological level of the host country and boost productivity growth under the condition that the spillover channel is open. However, most agricultural FDI enterprises invest and establish production bases in terms of China’s location advantages, abundant agricultural resources, and cheap labor. Due to the difficulty of productizing agricultural technologies and the inadequate intellectual property rights system in China, few agricultural FDI enterprises have taken the initiative to transfer their production technologies. Some transferred production technologies also run the risk of not matching the local market reality. At present, the quality of China’s agricultural labor force is generally low, and most agricultural producers find it difficult to imitate advanced technologies and production methods. In addition, foreign direct-investment enterprises, on the one hand, squeeze the market share and cause the “crowding-out effect” due to the brain drain of local enterprises, and on the other hand, the expansion of production scale and resource consumption slows down the pace of agricultural green transformation, aggravates agricultural surface pollution, and inhibits the growth of agricultural green TFP.
Agricultural technology inputs are not conducive to the growth of green TFP in agriculture. For every 1% increase in agricultural technology inputs, agricultural green TFP decreases by 0.12%. This shows that although China currently attaches some importance to agricultural technology inputs and invests a lot of human and material resources, there are problems, such as unreasonable input structure. The application of technology serves to increase production and income but fails to pay attention to the coordinated development of economic growth and environmental protection. The use of pesticides, fertilizers, and agricultural films drives productivity growth at a huge cost to the environment. However, due to data limitations, we were only able to use agricultural R&D personnel as a variable to measure agricultural technology inputs, which may affect the presentation of the final results; multiple perspectives may be needed to measure the robustness of the present findings in future studies.
The primary term of environmental regulation has a significant negative effect on agricultural green TFP, and the secondary term has a significant positive effect on agricultural green TFP. The negative effect of environmental regulation on green TFP in Chinese agriculture shows that the “cost-of-compliance” effect of environmental regulation on green TFP in Chinese agriculture at the early stage is greater than the “innovation-compensation” effect, which indicates that the government has invested a lot of financial and material resources in order to protect the environment, although the effect of environmental regulations is small and has not yet offset the negative impact of governance costs. However, a promising phenomenon is that the squared term of environmental regulation drives the growth of green TFP in agriculture, suggesting that the “innovation-compensation” effect increases at a faster rate after crossing an inflection point. Specifically, the increase in the intensity of environmental regulations makes agricultural producers reflect on their own problems of low factor utilization and high pollution emissions in the production process, prompting them to adopt new production technologies to optimize factor allocation, reduce pollution emissions, and increase the value added of their products [
40]. The optimization of factor allocation efficiency can improve agricultural production efficiency, and the increase in competitiveness due to higher-value-added products can also enable agricultural producers to earn excess profits in the short term, offsetting the negative impact of higher environmental management costs [
41]. In addition, with the government’s increasing attention to environmental protection issues, green finance subsidies are being introduced, which will reduce the R&D costs of clean technologies and financing costs for agricultural producers and promote the efficiency of environmental management. The environmental regulation introduced by the Chinese government have been encouraging research, development, and applications of green agricultural production technologies while preventing and controlling agricultural surface pollution. The concept of green development has been deeply rooted in the hearts of the public. The market competitiveness of green agricultural products is increasing, and the “innovative-compensation” effect of environmental regulation will become increasingly apparent.