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Abstract

This study analyzes the role of foreign direct investment in contributing to regional differences in productive efficiency in Chinese agriculture. We use a stochastic frontier production function model, explicitly incorporating foreign capital, to investigate the relative performance of the aggregate agricultural sector across provinces and over time. Thus we can determine if foreign direct investment policies might reasonably be expected to change the competitive environment of regional agricultural sector. We calculate an index of productive efficiency and estimate the determinants of regional variations in it.

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