Does Ecological Compensation Reform Enhance the Efficiency of Agricultural Eco-Product Value Realization? Evidence from China

How to promote regional agricultural sustainability through ecological compensation policy incentives and penalties has become a major concern worldwide. To evaluate the impact of ecological compensation reform on sustainable agricultural development, this study exploits China’s Ecological Compensation Incentive and Penalty Policy (ECIPP) reform as a quasi-natural experiment. Using panel data from 30 provinces (autonomous regions and municipalities) in China from 2012 to 2022, we construct a Staggered-Adoption Difference-in-Differences (SA-DID) model to identify the effects of policy implementation on the efficiency of agricultural ecological product value realization and its underlying mechanisms. The results show that: (1) the implementation of the ECIPP significantly improves the efficiency of agricultural ecological product value realization. On average, the policy increases the AEPVR efficiency score by 0.0869 units. (2) Mechanism analysis indicates that ecological compensation reform generates information transmission and structural adjustment effects. Specifically, the policy enhances government environmental attention and promotes the integration of agricultural industries, thereby improving the value conversion efficiency of agricultural ecological products. (3) Heterogeneity analysis reveals that the policy effect is more pronounced in regions with higher levels of public environmental concern and lower levels of fiscal decentralization. Furthermore, compared with the combined year-on-year and ranking-based assessment mechanism, the year-on-year assessment mechanism alone is more effective in enhancing policy performance. This study provides valuable insights for both developing and developed countries seeking to improve the effectiveness of ecological compensation policies and enhance the realization of value from agricultural ecological products.