Does industry convergence between agriculture and related sectors alleviate rural poverty: evidence from China

Abstract

Enhancing the synergies between agriculture and related sectors in rural areas is considered an important development strategy to eliminate rural poverty. This article provides evidence for this view by analyzing the effect of industry convergence between agriculture and related sectors on rural poverty. Based on China’s provincial panel data, we use two-way fixed effects model, system generalized method of moments and panel-corrected standard error estimator to quantitatively assess this effect. We find that: (1) the convergence of agriculture and tourism (ATOU), the convergence of agriculture and processing industry (APOS), and the convergence of planting and breeding industry (MIXA) have positive and significant effects on poverty reduction. The convergence of agriculture and the internet industry (AINT) has a positive but not significant effect. (2) Rural local employment plays an important role as a bridge in the impact of convergence on poverty reduction. ATOU and MIXA reduce poverty by increasing self-employment opportunities. APOS reduces poverty by providing more jobs. (3) Except for APOS, the effects of other types of convergence tend to stabilize or improve in the later period. (4) Convergence has the most significant impact on poverty reduction in western China. The findings provide inspiration for developing countries with agricultural foundations to choose appropriate rural development paths for reducing rural poverty.

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