Does new infrastructure outperform old infrastructure in China’s Agricultural Specialization: an empirical examination based on “One village One product”

Abstract

Abstract The realization of agricultural specialization in is often limited by the development of infrastructure, which is indicated by transaction costs, transportation conditions, and distance to markets; however, this might be remedied by institutional arrangements and collective action, as well as the development of internet and information technology. By using the data of China’s “One village, One product”, this article aims to examine the roles of new infrastructure and old infrastructure in agricultural specialization in China. In particular, whether new infrastructure of the emerging Internet and information technology can help these villages and towns to further expand their markets limited by old infrastructure is of great concern to us. The empirical results show that agricultural specialization is jointly determined by market distance and market scale, while internet and information technology itself can help in reducing the impact of market distances, the Internet and information technology reinforce the role of the market, which suggests that the Internet and information technology itself has not increased agricultural specialization in regions with unfavorable market conditions. Further policies facilitating new infrastructure are needed in remote villages and areas with backward markets to narrow location-induced inequalities by improving infrastructure and increasing public participation.