Can digital village construction improve agricultural total factor productivity? Evidence from a quasi-natural experiment in China

Introduction Digital Village Construction (DVC) represents a national strategy to integrate digital technologies with agriculture and rural development in China. Whether such a comprehensive, government-led digital transformation can raise agricultural total factor productivity (TFP) remains empirically underexplored, particularly at the county level. This study investigates the causal effect of DVC on agricultural TFP and clarifies the underlying mechanisms and heterogeneous impacts. Methods We treat China’s National Digital Village Pilot policy as a quasi-natural experiment and construct a time-varying DID design using county-level panel data from 2009–2023. Agricultural TFP is primarily measured via DEA–Malmquist indices based on a land–labor–capital input system and real agricultural output. We include county and year fixed effects and standard controls, and conduct extensive robustness checks. Mechanisms are examined through mediation analyses focusing on non-farm employment opportunities and production technical intensification. Results Baseline DID estimates indicate that DVC significantly increases agricultural TFP, and the result remains robust across multiple identification and measurement checks. Mechanism analyses suggest that DVC promotes TFP mainly through expanding non-farm employment opportunities and stimulating production technical intensification. Heterogeneity analyses show stronger effects in counties with higher levels of digital financial inclusion, in administratively classified counties, and in areas closer to provincial capitals. Discussion The findings provide causal evidence that comprehensive digital rural policies can enhance agricultural productivity by improving factor allocation, facilitating labor structural transformation and accelerating technology- and energy-intensive modernization of production. These research conclusions provide empirical evidence for further advancing digital village construction.