The Impact of Agricultural Global Value Chain Participation on Agricultural Total Factor Productivity

Abstract

Under the condition of opening up, participation in international specialization and global value chains (GVCs) has become the main source for more and more countries to obtain foreign resources and advanced technologies, thereby promoting productivity improvement and technological progress. What are the pathways of agricultural GVC participation that affect agricultural total factor productivity (TFP)? Is the impact of agricultural GVC participation on agricultural TFP consistent across different statuses and modes of agricultural GVC participation? This paper elaborates on the theoretical mechanism of agricultural GVC participation affecting agricultural TFP, and then empirically estimates the impact of different statuses and modes of agricultural GVC participation on agricultural TFP by taking 58 countries as examples. The results show that agricultural GVCs affect agricultural TFP by several direct and indirect pathways. There was a U-shaped relationship between agricultural GVC participation and agricultural TFP, which means that after crossing a certain threshold, the former has a positive impact on the latter. By participating in agricultural GVCs, agricultural TFP in high-income and upper-middle-income countries was significantly improved, while in lower-middle-income countries it was not. Both forward and backward agricultural GVC participation were conducive to improving agricultural TFP in high-income and upper-middle-income countries, but only backward agricultural GVC participation was conducive to improving agricultural TFP in lower-middle-income countries. Therefore, every country needs to actively explore its optimal pathway to participate in agricultural GVCs in order to maximize the participation benefits and promote the improvement in agricultural TFP, simultaneously.

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