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Abstract
Genetically modified cotton varieties have greater production efficiency for smallholders
in farming communities in China. We also find that the adoption of Bacillus
thuringiensis (Bt) cotton varieties leads to a significant decrease in the use of
pesticides. Hence, we demonstrate that Bt cotton appears to be an agricultural
technology that improves both production efficiency and the environment. In terms
of policies, our findings suggest that the government should investigate whether or
not they should make additional investments to spread Bt to other cotton regions
and to other crops.