Unravelling aggregate productivity effects of Bt cotton in china: a regression control approach using cross-country data

Evidence from farm trials and farm household surveys indicates that adopting Bacillus thuringiensis (Bt) cotton can significantly increase cotton farm productivity in developing countries. Whether these gains scale up to the industry level, however, remains unclear. This paper employs the regression control method (RCM) within a cross-country comparative framework to estimate the impact of Bt cotton adoption on aggregate agricultural productivity in China. Drawing on a balanced panel of 86 non-Bt-cotton-producing countries and regions, we construct counterfactuals for China and evaluate the effects on cotton yield and agricultural total factor productivity (TFP). Our results show that Bt cotton adoption exerted positive effects on industry-level cotton yield, but its effects on agricultural TFP were both statistically insignificant and economically small. Further analyses suggest that limited resource reallocation toward larger, more efficient cotton farms after Bt cotton adoption dampened aggregate gains, highlighting structural constraints that impede the translation of micro-level gains from biotechnology into sector-wide productivity improvements.