The Impact of Information and Communication Technology on the Technical Efficiency of Smallholder Vegetable Farms in Shandong of China

Abstract

Farmers have started to adopt Information and Communication Technology (ICT), which has considerable potential to impact farm performance. This study uses data from a 2018 survey of 763 vegetable smallholder farms in China to estimate the impact of ICT on technical efficiency (TE). We adopt propensity score matching to create a balanced sample of ICT users and non-users, and a stochastic frontier model with sample selection correction to compare the two groups’ TE. After accounting for self-selection bias from both observables and unobservables, the study finds a positive effect of ICT use on TE. On average, the TE score of ICT users is 0.64, whereas ICT non-users have a lower score of 0.57. A quantile regression analysis further reveals a heterogeneous impact of ICT on TE, with the largest effects among less efficient farms. These results suggest that vegetable farmers’ performance could be fostered by the widespread use of ICT.