The effects of telephone infrastructure on farmers' agricultural outputs in China

This paper examines the effect of farmers' access to communication technologies (CTs) on farmers' agricultural output at the aggregate level in the People's Republic of China (P.R. China) based on panel data. The paper uses a dynamic Cobb-Douglas aggregate production function and the generalised method of moments (GMM) as estimation techniques to estimate the parameters of interests. The research findings are: the estimated effects (measured by elasticity) of teledensity on the provincial level agricultural output have been positive and statistically significant both in the short and long runs. In the long-run, the size of the effect is substantial: from 0.94 to 1.06. This implies that the agriculture sector of the P. R. China has some potentials to derive benefit from the use of CTs like telephone. Hence, the Chinese government should consider policy support to expand communication infrastructure for the farmers.