Spatial Spillover Effect Of Agricultural Production On Industry

Agriculture is the foundation of the national economy and plays an important role inthe development of industry and the whole economy. With the promotion of the reformof China’s economic system, the share of agricultural output in the national economy isgradually declining. The fundamental status of agriculture in the national economy isbeing questioned and some areas ignore the development of the agricultural for the sakeof industries of high economic effect.This paper firstly summarizes the basic theory of agricultural development，andelaborates the contribution of agriculture in economic development from theperspectives of product contribution, market contribution, factor contribution andforeign exchange contribution. Secondly, this paper logistically analyzes the promotioneffect of agricultural production on industry by establishing a two-sector productionmodel framework, and studies the diminishing effect of agriculture. Then, a spatialdynamic panel data model is built based on inter-provincial panel data from1996to2011. Starting with the spatial dependence, this paper empirically analyze the spatialspillover effects of agricultural production on the industry and describe its spilloverstrends by stages. Finally, some policy recommendations are proposed to promote thecoordinated development of regional industrial structure and the realization ofcomplementarities among different regions on the basis of theoretical analysis andempirical test results.The results shows that:(1) Although the share of agricultural output in the nationaleconomy is continuing to decline, the promotion effect of agriculture on other sectors,even the national economy is still important.(2) Agricultural production has ansignificant impact on the industries of local and adjacent areas through the mechanismof land price, wage and capital price.(3) The agricultural production of a province doeshave a significant positive spatial spillover effects on the industry of adjacent areas.(4)Stage study shows that all stages of agricultural production shows a positive spacespillover effect on industry, but it shows a diminishing trend.