Insurance and Agricultural Productivity in China: The Moderating Roles of Moral Hazard and Governance

YU, WANG (2025) Insurance and Agricultural Productivity in China: The Moderating Roles of Moral Hazard and Governance. PhD thesis, Universiti Malaysia Sarawak (UNIMAS).

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Abstract

This study examines the development of agricultural insurance in China by analysing the mechanisms through which agricultural insurance influences agricultural total factor productivity (TFP). Using panel data from 31 provinces over the period 2007–2023, agricultural TFP is estimated through the DEA–Malmquist index. The results indicate clear spatial and temporal differences in TFP growth among provinces, driven jointly by technological progress and improvements in technical efficiency. To empirically assess the impact of agricultural insurance on agricultural TFP, the study incorporates two moderating variables country governance and moral hazard into the analytical framework. A baseline fixed-effects model, a GMM model, moderating-effect models, and a threshold model are employed to ensure the robustness of the findings. Both the baseline and GMM estimations consistently demonstrate that agricultural insurance significantly enhances agricultural TFP across Chinese provinces. Regarding control variables, the baseline model suggests that household income levels is conducive to TFP growth, whereas the GMM results highlight the constraining effects of disaster shocks. Analysis of moderating effects further reveals that strong country governance amplifies the positive influence of agricultural insurance on TFP, while moral hazard weakens this relationship. Additionally, the threshold model identifies a non-linear effect: once agricultural insurance development surpasses a certain level, its capacity to promote agricultural TFP becomes markedly stronger.

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