Interactive relationship between non-farm employment and mechanization service expenditure in rural China
China Agricultural Economic Review
ISSN: 1756-137X
Article publication date: 30 April 2021
Issue publication date: 17 January 2022
Abstract
Purpose
The purpose of this study is to investigate the interactive relationship between non-farm employment and mechanization service expenditure.
Design/methodology/approach
The study employs an innovative two-stage probit least squares (2SPLS) model to analyze the survey data collected from 1,148 rural households in China. This model not only simultaneously estimates the impact of non-farm employment on mechanization service expenditure and the impact of mechanization service expenditure on non-farm employment, but also addresses endogeneity issues associated with these two activities.
Findings
The empirical results show that non-farm employment and mechanization service expenditure are jointly determined. In particular, the study finds that non-farm employment significantly increases mechanization service expenditure, and vice versa. The results are confirmed by an estimation that captures a dichotomous decision of mechanization service usage. The interactive effects of non-farm employment on mechanization service expenditure are heterogeneous between male and female household heads and among households with different member sizes. Further analyses reveal that (1) mechanization service expenditure increases with increasing non-farm working time; (2) local non-farm employment, rather than provincial non-farm employment, has a larger impact on mechanization service expenditure; and (3) the number of household members employed in non-farm works does not affect mechanization service expenditure significantly.
Originality/value
Although mechanization service markets are rapidly growing in many developing and transition countries, little is known about how service purchasing interacts with farmers' decisions to work in the non-farm sector. This study makes the first attempt by investigating the interactive effects of non-farm employment on mechanization service expenditure in rural China. The findings provide significant evidence for policymakers in China and other countries in their efforts to generate non-farm work opportunities and promote agricultural mechanization, with the aim of boosting rural development and improving farm economic performance.
Keywords
Acknowledgements
Xiaoshi Zhou acknowledges the financial support from the National Natural Science Foundation of China (No. 72003089). Yanzhi Guo acknowledges the funding support from the Chinese Academy of Agricultural Sciences for the Science and Technology Innovation Project (No. IFND2019-3) and the funding support from the National Agriculture Science Data Center for the Food Nutrition and Health Project. Hongyun Zheng acknowledges the financial support from the National Natural Sciences Foundation of China (71873050).
Data Availability Statement: The data that support the findings of this study are available from the leading author, Hongyun Zheng, upon reasonable request.
Conflict of Interests: There is no conflict of interest.
Citation
Zheng, H., Ma, W., Guo, Y. and Zhou, X. (2022), "Interactive relationship between non-farm employment and mechanization service expenditure in rural China", China Agricultural Economic Review, Vol. 14 No. 1, pp. 84-105. https://doi.org/10.1108/CAER-10-2020-0251
Publisher
:Emerald Publishing Limited
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