The effects of institutional opening-up on sustainable agricultural development and its mechanisms: evidence from a quasi-natural experiment in China’s Pilot Free Trade Zones

Given the limitations of resources and the environment, agricultural progress must follow a sustainable development path. The Pilot Free Trade Zones (PFTZs), as pioneers for China’s reform and opening up, provide a unique perspective for studying how institutional opening-up affects Sustainable Agricultural Development (SAD). This paper utilizes official statistical yearbooks from 276 Chinese prefecture-level cities, compiled by local statistical bureaus between 2008 and 2021, and employs various analytical methods including the propensity score matching (PSM), staggered difference-in-difference (DID), etc. Results show that PFTZs significantly enhance SAD in their host cities, through important channels such as agricultural technology innovation, green financial support, and agricultural industry structure optimization. They generate significant spatial spillover effects through industrial agglomeration, market diffusion, and technology diffusion. Furthermore, the impact of PFTZs on SAD is more pronounced in non-major grain-producing regions, non-resource cities, areas with lower levels of agricultural development, and higher levels of institutional innovation. Therefore, to effectively leverage the role of PFTZs in promoting SAD, it is crucial to further strengthen support for agricultural technology innovation, improve the green financial support system, reinforce spatial coordination in development, and implement corresponding policies in accordance with local conditions.