Is the economic benefit of Bt cotton dying away in China

Abstract

Purpose

The purpose of this paper is to try to empirically answer whether the economic benefit of Bt cotton is dying away in China. As the development of the pest resistance and the outbreak of the secondary pest, it was believed that economic benefit of Bt cotton is dying away. And reduction of cotton sown area in recent years had been considered as one of the consequences. This study empirically estimates the impact of Bt cotton adoption on cotton sown area.

Design/methodology/approach

This paper uses regression techniques based on provincial level data. In addition, the fixed-effects model is used to control the impact of those time-consistent variables. Finally, several scenarios are estimated for the robustness of the estimation results.

Findings

This study shows that the adoption of Bt cotton has positive impact on cotton sown area. On the other hand, the increasing labor cost and decreasing cotton price might be the real reasons behind the decrease of cotton sown area.

Originality/value

This, it is believed, is one of the first studies to empirically answer the impact of Bt cotton adoption on cotton sown area in China, using national representative data.

Citation

Qiao, F. and Yao, Y. (2015), "Is the economic benefit of Bt cotton dying away in China", China Agricultural Economic Review, Vol. 7 No. 2, pp. 322-336. https://doi.org/10.1108/CAER-01-2013-0008