Does urbanization undermine agricultural sustainability? Evidence from China

Abstract

This study aims to explore the relationship between urbanization and agricultural development in China, focusing on the mechanisms through which urbanization influences agricultural sustainability. It investigates the role of urbanization in promoting agricultural development through resource agglomeration, technological advancement, and market demand expansion. Using panel data from 31 Chinese provinces between 2007 and 2021, this study applies the entropy method to construct comprehensive evaluation indices for agricultural environments and resources. Bidirectional fixed effects, mediation effect, and moderation effect models are employed to analyze the influence of urbanization on agricultural development systematically. The study finds that urbanization significantly promotes agricultural development by enhancing resource agglomeration, technological advancement, and expanding market demand. Benchmark regression results indicate that a 1% increase in urbanization raises the agricultural environment and resource development indices by 0.351 and 0.374, respectively. Income level partially mediates the relationship between urbanization and agricultural development, as urbanization optimizes resource allocation by increasing farmers’ incomes, indirectly driving agricultural modernization. Regional innovation capacity positively moderates the urbanization-agriculture relationship, with high-innovation regions amplifying urbanization’s benefits through technology diffusion and institutional optimization. Urbanization plays a crucial role in agricultural development, contributing to resource optimization, income enhancement, and technological innovation. The study underscores the importance of innovation and income level improvements in maximizing the benefits of urbanization for agriculture.