Specialty agriculture, farming efficiency, and resource reallocation: an empirical and quantitative analysis of China

Based on a quasi-natural experiment arising from China’s policy of designating Advantageous Zones for Specialty Agricultural Products, this study employs panel data from 566 Chinese counties between 2011 and 2021 and applies a multi-period difference-in-differences approach to identify the causal effect of specialty agriculture development on county-level agricultural production efficiency. The findings reveal that the specialized development of specialty agriculture significantly enhances county-level agricultural production efficiency. Mechanism analysis indicates that the policy promotes agricultural production efficiency through three non-obvious channels: curbing the expansion of inefficient agricultural industries, optimizing the brand structure of agricultural products, and narrowing the income disparity among farmers. Further heterogeneity analysis shows that the policy effects are more pronounced in regions with lower levels of financial development and weaker transportation infrastructure. This study provides a new perspective for understanding the efficiency mechanisms of specialty agriculture policies and offers important implications for developing countries seeking to promote agricultural modernization through regional industrial policies.