Rural finance, farmland transfer and agricultural production technical efficiency: Evidence from China

This paper studies the roles played by rural finance and farmland transfer on agricultural production technical efficiency, using data from the second agricultural census of China. It first estimates agricultural production technical efficiency of each administrative area of China by employing Data Envelopment Analysis. A Tobit model is then applied to investigate the effects of formal credit, informal credit and farmland transfer on technical efficiency. The empirical results suggest that rural formal credit and farmland transfer both play positive role on technical efficiency, while informal credit constrains the improvement of technical efficiency.