Effect Of FDI On Agriculture TFP

Agriculture is a basic industry, especially for China which has more than1.3billion people, agriculture is particularly important. With the deepening reform and opening up, foreign investment in China increased year by year, at the same time, the foreign investment in agricultural also increased and FDI has become the main form of foreign capital. ADM,Bunge,Cargill and Louis Dreyfus,which are known as ’ABCD’, have gradually entered into grain fields in China,and penetrated into agricultural production, processing, mobile and other sectors, In a word,foreign captital has penetrated into various aspects of agriculture recent years.Besides, food prices and food supply fluctuated repeatedly these years, which draw many people’s attention to food security issues. This paper makes food supply as a starting point, analyses the impact of foreign investment on agricultural productivity from the perspective of agricultural productivity, in order to test the spillover effects of FDI in the agricultural sector, and then analyses the impact of foreign investment on China’s total food supply, which has a great meaning for food security in China.This paper uses DEA-Malmquist to measure the TFPof Tianjin and other15Provinces between2000and2011, and then decomposes TFP into technical progress and efficiency changes, Based on this, then analyse their changing trend. The results show that,between2000and2011, agricultural TFP growth of the15provinces remain relatively stable, the average annual TFP growth is3.9%, of which technological progress is3.1%,Efficiency Change is0.8%, technological progress is the main driver of agricultural productivity growth o the15regions, the contribution of efficiency change to TFP growth is limited.Based on the calculation of total factor productivity, this paper regards FDI as one of the influence factors of agricultural TFP, and the controls the level of human capital and other factors, uses panel data model to analysis the impact of FDI on agricultural TFP, so that it can test the FDI spillovers in the agricultural sector. Regression results indicates that,during the sample interval, FDI has a significant negative effect on agricultural TFP and technical efficiency,while has a positive effect on technical progerss, but not significant.It indicats that foreign capital has a significant negative spillover effects (negative spillover) in agriculture TFP and technical efficiency,but a positive spillover in technical progress,which is not significant.From the perspect of spillover channels,this paper includes that there maybe some problems in the spillover channels. On the one hand,compared with foreign enterprises which has the advantage of technology, scale and capital,thus they are more competive than domestic companies,which make the scale of domestic enterprises smaller and smaller and have a crowding out effect on domestic enterprises so that have a negative effect on productivity growth;On the other hand, due to the characteristic of agricultural technology,it is difficult to be productized,in order to maintain its competitive advantages,the foreign enterprises will prevent the spillover effects from occurrencing; In addition, human capital flow effects channels indicates that foreign enterprises have higher wages and benefits and it is attracted to the outstanding employees of domestic enterprises,which results in the loss of talented employees in domestic enterprises,so it hinders the growh of productivity.