Did the Establishment of Poyang Lake Eco-Economic Zone Increase Agricultural Labor Productivity in Jiangxi Province, China?

In this paper, we take the establishment of Poyang Lake Eco-Economic Zone in 2009 as a quasi-natural experiment, to evaluate its influence on the agricultural labor productivity in Jiangxi Province, China. The estimation results of the DID method show that the establishment of the zone reduced agricultural labor productivity by 3.1%, lowering farmers’ net income by 2.5% and reducing the agricultural GDP by 3.6%. Furthermore, this negative effect has increased year after year since 2009. However, the heterogeneity analysis implies that the agricultural labor productivities of all cities in Jiangxi Province will ultimately converge. We find that the lack of agricultural R&D activities and the abuse of chemical fertilizers may be the main reasons behind the negative influence of the policy, by examining two possible transmission channels—the R&D investment and technological substitution. Corresponding policy implications are also provided.