Analysis of the Impact of Fiscal Revenue and Expenditure on China’s Grain Production Using Panel Double-Kink Regression Model

This study examines whether the effects of fiscal revenue and expenditure on grain production in China are nonlinear. Using a balanced panel of 31 provinces from 2007 to 2021, we analyze major revenue-side and expenditure-side fiscal instruments, including the cultivated land occupation tax, value-added tax, agricultural insurance subsidies, agricultural loan interest subsidies, rural minimum living security subsidies, education expenditure, and transportation infrastructure expenditure. To identify regime-dependent marginal effects, we employ panel kink and double-kink regression models with endogenously estimated kink points. The results show that fiscal effects are intensity-dependent rather than constant. The cultivated land occupation tax exhibits a kinked relationship with grain production, with a stronger land-protection effect beyond a certain policy intensity. Agricultural insurance subsidies display a double-kink pattern, with the strongest positive effect concentrated in an intermediate subsidy range. Rural minimum living security subsidies are positively associated with grain production at lower levels, but their marginal effect weakens and may become negative after the kink point. Overall, the findings suggest that fiscal policy effectiveness depends not only on policy direction but also on policy intensity, implying that grain-support policies should be calibrated with attention to nonlinear threshold effects.