Place‐Based Policies, New Agricultural Operating Entities Development, and Structural Transformation in China

ABSTRACT This paper examines the impact of China's Specialty Agricultural Products Advantageous Zones (AZs), a prominent place‐based policy, on the development of new agricultural operating entities (NAOEs). Using detailed registration data of NAOEs, we find that the establishment of AZs increases the operating revenue of NAOEs by 4.4% in the leading industry. However, the magnitude of this effect varies by industry, market, and geographic characteristics, with greater benefits for entities located downstream of leading industrial chains, those involved in industrial integration, and those operating in areas with higher market competition or potential. These effects are primarily driven by increased land availability, industry agglomeration, market competition, and innovation within AZs. Additionally, our analysis reveals spillover effects on leading industry entities outside AZs. Within four years of AZ establishment, we also observe a significant and positive structural transformation in local agriculture.