The role of sustainable agro-public finance in the natural disaster–agricultural growth nexus: evidence from Chinese provinces

Purpose This study examines whether agro-public finance – local government expenditure on agriculture – mitigates the adverse effects of natural disasters on agricultural growth in China and whether the long-run fiscal payoff is larger in provinces with persistently higher disaster exposure. Design/methodology/approach Using a province-level panel for China over 2006–2024, we estimate a panel error-correction model derived from a cross-sectionally augmented ARDL (CS-ARDL) framework. The specification allows for a long-run relationship between agricultural value added, public agricultural expenditure, rural population and disaster exposure while separately modelling short-run adjustment dynamics. We complement the baseline estimates with a split-sample analysis based on persistent disaster exposure to assess heterogeneity. Findings Agro-public finance is positively and significantly associated with agricultural value added in the long run, whereas short-run effects are weaker, indicating that fiscal support operates mainly through gradual structural channels rather than immediate output stabilisation. The error-correction term is consistently negative and significant, implying convergence toward a long-run equilibrium after shocks. The split-sample results further show that the long-run payoff to agro-public finance is larger in provinces facing higher disaster exposure. Research limitations/implications The analysis uses a broad expenditure measure and therefore cannot isolate the contribution of individual budget items such as irrigation, insurance subsidies or relief spending. The disaster proxy is based on affected area and may partly reflect agricultural scale as well as shock intensity. Future research should disaggregate expenditure categories, use normalised disaster measures and explore additional heterogeneity by fiscal capacity and region. Practical implications The results support disaster-contingent and performance-oriented agricultural budgeting. In higher-risk provinces, sustained investment in resilience-enhancing public goods and rapid-disbursement recovery instruments is likely to yield the largest long-run payoff, whereas lower-risk provinces may gain more from productivity-oriented agricultural public goods and stronger expenditure monitoring. Originality/value The study provides province-level evidence on the long-run and short-run relationship between agricultural public expenditure, natural disasters and agricultural value added in China. Rather than treating the expenditure proxy as a narrowly earmarked green-finance measure, the paper interprets it as broad agro-public finance with resilience-enhancing potential and shows that its long-run payoff is stronger in higher-risk provinces.