Trade policy uncertainty and agricultural specialization: Evidence from rural household in China

This study examines the impact of reductions in trade policy uncertainty (TPU) on householdlevel agricultural cultivation strategies. Utilizing a comprehensive national household-product level dataset from the National Fixed Point Survey (NFS) spanning the period from 1998 to 2008, we uncover compelling evidence that rural households tend to enhance their degree of planting specialization as TPU diminishes, attributable to China's accession to the WTO. This finding remains robust across various regression models and alternative measures of variables, and is particularly pronounced among households with lower risk aversion and in prefectures with poorer transportation conditions. Further analysis reveals that the underlying mechanisms driving this phenomenon are primarily the household investment in productive resources and the exploitation of comparative advantages.