What Drives Moderate-Scale Operation Performance in Family Farms? A Dual Perspective of Factor Endowments and Policy Perception

Promoting moderate-scale operation in family farms is widely regarded as important for improving agricultural efficiency and linking smallholders to modern agriculture. Using data from 951 family farms across 20 county-level units in five prefecture-level cities of the Gansu Hexi Corridor, this study examines the associations of factor endowments and policy perceptions with farm performance. Performance is measured as the inverse hyperbolic sine of winsorized 2024 operating net income per mu. The analysis estimates separate effects for endowment and policy dimensions and reports HC1, county-clustered, and wild-cluster bootstrap inference. Three findings emerge. Educational attainment, registered capital, family labor, and operating years show no statistically significant association with performance. Operating scale is negatively associated with net income per mu; however, this result should not be interpreted as evidence of scale diseconomies, because land area is embedded in the denominator. When total net income is used, the scale coefficient is positive. Procedural fairness is the only policy-perception dimension consistently associated with objective performance across alternative specifications. Perceived support and planning rationality show no comparable association.