How to overcome the productivity pains of digital transformation? The U‑shaped TFP trajectory of Chinese agricultural firms, fixed‑asset constraints and subsidy threshold effects
- 1chool of Economics, Yunnan University of Finance and Economics, Kunming, China
Abstract
Digital transformation has profoundly reshaped agricultural production systems, yet its productivity effects remain insufficiently explored. Using panel data of Chinese listed agricultural firms from 2010 to 2022, this paper examines the effects, mechanisms, moderation, and heterogeneity of digital transformation on total factor productivity (TFP). First, digital transformation exerts a significant U-shaped nonlinear effect on TFP: the linear coefficient is −0.154 (p < 0.01), and the squared coefficient is 0.036 (p < 0.01), indicating that early-stage fixed asset accumulation, organizational restructuring, and system adaptation frictions drag down TFP, while after crossing the critical threshold, network synergy and factor allocation optimization drive sustained TFP growth. Second, the fixed asset-to-revenue ratio serves as a key transmission channel, forming a nonlinear mediation path of “digitalization → fixed asset-to-sales ratio → TFP.” Bootstrap tests show that the indirect effect turns from negative to positive as digitalization increases and is significant only at high levels. Third, government subsidies significantly moderate the U-shaped relationship, shifting the turning point leftward and increasing curvature, reflecting a “turning point forward shift and dividend amplification” mechanism. Fourth, the U-shaped relationship is more pronounced for non-state-owned, small-scale, and livestock enterprises. Theoretically, this paper constructs a nonlinear mediation framework of “digitalization–asset structure–TFP,” reveals the inverted U-shaped transmission of the fixed asset-to-revenue ratio, identifies the nonlinear moderating role of government subsidies, and enriches research on digital transformation and agricultural TFP. Practically, it suggests establishing a “pain period” tolerance mechanism, shifting subsidies toward soft support, and precisely supporting non-state-owned, small-scale, and livestock enterprises to release productivity dividends.
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BibTeX
@article{zhong2026overcome,
title = {{How to overcome the productivity pains of digital transformation? The U‑shaped TFP trajectory of Chinese agricultural firms, fixed‑asset constraints and subsidy threshold effects}},
author = {Xiaorong Zhong and Changbiao Zhong},
journal = {Frontiers in Sustainable Food Systems},
year = {2026},
month = oct,
doi = {10.3389/fsufs.2026.1992915},
url = {https://doi.org/10.3389/fsufs.2026.1992915},
note = {CC BY},
}
RIS
TY - JOUR
TI - How to overcome the productivity pains of digital transformation? The U‑shaped TFP trajectory of Chinese agricultural firms, fixed‑asset constraints and subsidy threshold effects
AU - Xiaorong Zhong
AU - Changbiao Zhong
PY - 2026
DA - 2026/10/25
JO - Frontiers in Sustainable Food Systems
DO - 10.3389/fsufs.2026.1992915
UR - https://doi.org/10.3389/fsufs.2026.1992915
AB - Digital transformation has profoundly reshaped agricultural production systems, yet its productivity effects remain insufficiently explored. Using panel data of Chinese listed agricultural firms from 2010 to 2022, this paper examines the effects, mechanisms, moderation, and heterogeneity of digital transformation on total factor productivity (TFP). First, digital transformation exerts a significant U-shaped nonlinear effect on TFP: the linear coefficient is −0.154 (p < 0.01), and the squared coefficient is 0.036 (p < 0.01), indicating that early-stage fixed asset accumulation, organizational restructuring, and system adaptation frictions drag down TFP, while after crossing the critical threshold, network synergy and factor allocation optimization drive sustained TFP growth. Second, the fixed asset-to-revenue ratio serves as a key transmission channel, forming a nonlinear mediation path of “digitalization → fixed asset-to-sales ratio → TFP.” Bootstrap tests show that the indirect effect turns from negative to positive as digitalization increases and is significant only at high levels. Third, government subsidies significantly moderate the U-shaped relationship, shifting the turning point leftward and increasing curvature, reflecting a “turning point forward shift and dividend amplification” mechanism. Fourth, the U-shaped relationship is more pronounced for non-state-owned, small-scale, and livestock enterprises. Theoretically, this paper constructs a nonlinear mediation framework of “digitalization–asset structure–TFP,” reveals the inverted U-shaped transmission of the fixed asset-to-revenue ratio, identifies the nonlinear moderating role of government subsidies, and enriches research on digital transformation and agricultural TFP. Practically, it suggests establishing a “pain period” tolerance mechanism, shifting subsidies toward soft support, and precisely supporting non-state-owned, small-scale, and livestock enterprises to release productivity dividends.
SN - 2571-581X
ER -