Does Farmland Leasing Affect Agricultural Total Factor Productivity? Insights From Chinese Rice Farmers

ABSTRACT China seeks to encourage farmland leasing to stimulate new economic growth and make agriculture more attractive to young laborers. This paper analyzes panel data from Jiangsu province, employing a stochastic frontier cost function to calculate total factor productivity (TFP) growth and its components. Additionally, a two‐stage least squares model is used to assess the impacts of farmland leasing on TFP growth. The findings indicate that TFP growth significantly contributes to output growth, averaging 2%, and exhibits a fluctuating yet upward trend. Notably, the contributions of technological progress and technical efficiency change to TFP growth remain relatively stable at approximately 1.5%–2%, while changes in scale efficiency are the primary drivers. Farmland leasing markedly enhances TFP growth and scale efficiency change, as opposed to technological progress and technical efficiency change. An increase of 1 mu in farmland leasing size results in a 1.565% and 1.569% enhancement in TFP growth rate and scale efficiency change, respectively. The enhancement effects on TFP growth and scale efficiency change are more pronounced for large‐scale farmers, particularly following the TRS reform. This study also draws some policy implications.