The Belt and Road Initiative and Total Factor Productivity of Chinese Agricultural Firms: Empirical Evidence Based on Cotton Firms

The Belt and Road Initiative (BRI) has reshaped the external operating environment of Chinese firms, yet its productivity effects in traditional agricultural industries remain insufficiently understood. Using panel data for 142 Chinese A-share listed cotton firms from 1992 to 2023, this study applies a difference-in-differences framework to estimate the effect of BRI participation on firm-level total factor productivity (TFP). The results show that BRI participation significantly increases the TFP of Chinese cotton firms. This finding remains robust to propensity score matching and placebo tests. Mediation analysis indicates that the BRI improves firm-level TFP by reducing transaction costs and enhancing resource allocation efficiency, as proxied by the asset turnover ratio. Ownership-based analysis suggests that the productivity effect is stronger among state-owned firms than among non-state-owned firms. Digital transformation also strengthens the positive relationship between the BRI and TFP. These findings extend research on the microeconomic effects of openness-oriented policies and demonstrate the importance of transaction-cost reduction, efficient resource allocation, and digital capabilities in supporting productivity growth in traditional agricultural industries.