Agricultural digitalization has become an important power source to promote high-quality development of agriculture (朱秋博et al., 2019). Digital technology is the core of the development of agricultural digitalization, and the wide application of digital technology has also brought about social problems such as the digital divide, data misuse, data security, etc., and the legal system can effectively guard against and manage the risks that may be generated by digital technology (Guerra et al., 2023), supporting the sustainable development of agricultural digitalization (MacPherson et al., 2022). The reason for this is that the legal system regulates every detail of the technology (Beck, 2020), compensates for the opportunity costs and financial risks of investments in agricultural digitization (Ehlers et al., 2021), and safeguards farmers' data sovereignty (Härtel, 2020). Digital technology administrative penalties are one of the concrete manifestations of the implementation of the legal system (Ma Changshan, 2018), which shows that it is increasingly important to study the impact of a country's legal system on agricultural digitization and that digital technology administrative penalties will inevitably affect the development of agricultural digitization. How do digital technology administrative penalties affect agricultural digitization? The answer to this question has important implications for many developing countries whose legal systems are yet to be perfected.
According to the principle of criminal economics, administrative punishment has a deterrent effect, including special deterrence for violating firms and general deterrence for potentially violating firms (林润辉 et al., 2015). At the level of digital technology, good administrative regulatory policies can not only deter enterprises from digital technology violations but also motivate enterprises with potentially violating intentions to regulate their digital technology to comply with relevant policies (Wang Yun et al., 2020). At the level of financial support, on the one hand, financial resources are important resources necessary for agricultural digitization (Luo et al., 2023), and the financial system affects the allocation of financial resources, which in turn affects the development of agricultural digitization (Li et al., 2020). The imposition of administrative penalties on digital technologies can assist financial institutions in assessing, managing, and supporting legitimate agricultural digital development entities and achieving the expulsion of bad money from good money. On the other hand, when firms realize that the cost of being penalized by administrative penalties is higher than the production cost of complying with regulations, they will increase their investment in production technologies (Lee & Xiao, 2020). Therefore, the deterrent effect of administrative penalties for digital technology on the subjects of agricultural digital development will increase capital investment in the field of agricultural digital production, which will be beneficial to the development of agricultural digitalization. At the level of human capital, the social learning theory proposed by Bandura (1969) suggests that people can cultivate and shape their behaviors based on indirect experiences formed by observing the behaviors of others and their consequences. Therefore, digital technology administrative punishment can not only enhance the digital literacy of agricultural digitalization talents at the stock level but also inject new talent momentum for agricultural digitalization development at the incremental level. Accordingly, we hypothesize that administrative punishment of digital technology can promote agricultural digitization. Then, based on Chinese city data from 2008 to 2020, we empirically test the impact of administrative penalties for digital technology on agricultural digitization in China by using yearly and city-based two-way fixed-effects models.
On the measurement of the level of agricultural digitization. There is no publicly available data characterizing the level of agricultural digitization in each region. Based on data availability, this paper measures the level of agricultural digitization in each city in terms of infrastructure, external support, and internal digitization processes. In terms of infrastructure, data is the key to agricultural digitization, and data centers are the key infrastructure for agricultural digitization. For this reason, this paper collects the number of data centers in each city from Enterprise Alert Link (https://www.qyyjt.cn/) to measure the infrastructure required for the digitization of agriculture. External support, computer software, and hardware are the premise of the implementation of digitalization in agribusiness. Computer software and hardware enterprises have a good role in assisting the digitization of agribusiness. This paper is from the enterprise's early warning through the collection of the number of hardware and software enterprises in each city to measure the agricultural digitization of the predecessor of the support. Enterprises engaged in the Internet, digital advertising, digital content publishing, and other businesses have a good role in assisting agricultural enterprises to realize procurement and sales digitization. This paper from the enterprise's early warning through the collection of each city's business scope includes the Internet, digital advertising, digital content publishing, and other content of the number of enterprises to measure the agricultural digitization of the purchase and sale of digital support. Enterprises engaged in industrial robot manufacturing, industrial automatic control system device manufacturing, and other intelligent consumer equipment manufacturing have a driving and spillover effect on the realization of production process digitization in agricultural enterprises, and this paper collects the number of enterprises whose business scope includes industrial robot manufacturing, industrial automatic control system device manufacturing, and other intelligent consumer equipment manufacturing in each city from the Enterprise Alert Pass to measure the support for production digitization in agricultural digitization. Production digitization support.
In terms of the digitization process, digital facility cultivation, digital forestry, automated farming, and other smart agriculture are the main forms of agricultural digitization. In this paper, the number of enterprises whose business scope includes digital facility planting, digital forestry, automated farming, and other intelligent agriculture in each city is collected from Enterprise Alert Pass to get the number of agricultural digitization enterprises to measure the internal digitization process.
This paper obtains five data items, such as the number of data centers, the number of front-end support enterprises, the number of purchase and sale digitalization support enterprises, the number of production digitalization support enterprises, and the number of agricultural digitization enterprises in each city in each year from 2008 to 2020, and then ADIG is obtained as a proxy variable for the level of agricultural digitization by using the factor analysis method to measure. Then, rADIG was calculated by Ln(1 + ADIG) to obtain rADIG as another proxy variable for the level of agricultural digitization.
On measuring the intensity of administrative penalties for digital technology. In China, in addition to the courts, administrative authorities such as the People's Bank of China (PBOC) and its branches have the authority to impose administrative penalties on regulated firms under their jurisdiction. We define digital technologies as artificial intelligence, blockchain, cloud computing, big data, Internet of Things, meta-universe, augmented reality, virtual reality, quantum computing, and 5G. Therefore, we searched for firms with "artificial intelligence, blockchain, cloud computing, big data, the Internet of Things, the meta-universe, augmented reality, virtual reality, quantum computing, and 5G" in their firm names from the Shanghai Dazhi Caihui Data Technology Co. received administrative penalties, whose data come from administrative agencies (e.g., the People's Bank of China), and then statistics on the number of administrative penalties in each city from 2008 to 2020 to obtain Admsanction. then ENFR is calculated as Admsanction/total population to obtain ENFR, which serves as the intensity of administrative penalties for digital technology. At the same time, rENFR was standardised by (Admsanction-Min(Admsanction))/(Max(Admsanction)-Min(Admsanction))*100 to obtain rENFR as another proxy variable for the intensity of administrative penalties by digital technology.
Based on the above research design, we found that the deterrent effect of digital technology administrative penalties can promote agricultural digitization, and the greater the intensity of a city's digital technology administrative penalties, the higher its level of agricultural digitization. The results suggest that digital technology administrative penalties will promote agricultural digitization in three aspects: digital technology, financial support, and human capital. The deterrent effect of digital technology administrative punishment will regulate the development and application of digital technology in agricultural digitization enterprises, prompting the upgrading of digital technology innovation, opening up external financing channels for the development of agricultural digitization, enhancing the proportion of internal capital investment, enhancing the digital literacy of agricultural digitization talents, and injecting new talent power. The conclusion still holds after changing the measurement of dependent variable and independent variables, excluding endogeneity, and controlling fixed effects. Second, digital technology administrative punishment can enhance the level of digital technology entrepreneurship and social risk-taking, thus promoting the development of agricultural digitalization. Finally, the promotional effect of digital technology administrative penalties on agricultural digitization is heterogeneous, with a greater effect in cities with low carbon emissions.
On the one hand, this study contributes to the literature on agricultural digitization. The influencing factors of agricultural digitalization have been widely discussed in the existing literature. In terms of technology, digital technology is the basis for the development of agricultural digitalization (邹辉, 2021) and improves the allocation efficiency of various types of factors for the development of agricultural digitalization (柯雨欣&王之禹, 2022; 孙光林 et al., 2023). Digital technological innovation can realise new changes in agricultural digital technology (任忠香&徐宣国, 2023) and generate new quality productivity in digital agriculture (Wang Qinmei and Yang Junge, 2024). In the economic aspect, the development of digital inclusive finance provides a new financial industry for the development of agricultural digitalization (Teng et al., 2023). In terms of talent, the human environment factors of high-quality rural labour and rich innovation and team consciousness will accelerate the development of agricultural digitalization (Wen Jing & Guo Li, 2018). On the political side, factors such as the implementation of relevant policies (Cook et al., 2022), public investment in digital infrastructure (Rodino et al., 2023), and the institutional provision of digital governance (Yao & Sun, 2023) will affect the speed of agricultural digitalization. Existing literature has rarely explored the institutional perspective, particularly in terms of legal system enforcement, to explore its impact on agricultural digitization. Our study enriches the literature on factors affecting agricultural digitization in China by looking at the administrative penalties of digital technology.
On the other hand, our study contributes to the literature exploring the effects of the implementation of legal systems. Existing literature has extensively discussed the effects of legal systems on agriculture and agricultural digitization. A sound legal system is an effective way to ensure the sustainable development of agricultural investment (Wan & Chen, 2019), agricultural infrastructure development (Pascaris, 2021), food security (Aubry, 2019), and new technologies in agriculture (Lotz et al., 2018) in China. Laws applicable to agricultural digitization are emerging but highly fragmented (MacPherson et al., 2022), and reliable legal frameworks can safeguard data privacy, data access, and data security in agricultural digitization (Kaur & Dara, 2023; Garske et al., 2021), ensure that the expected benefits of agro-technological innovations are realized (Martin, 2021), and expand access to precision agriculture. (Finger et al., 2019). Strengthening the construction of laws, regulations, and institutions to promote the transparency of key algorithms can circumvent the dividend discrimination in the process of agricultural digitization due to the differentiation of possession and use rights of digital technology by different subjects (Ibrahim & Truby, 2023) and overcome the dilemma of the fragmentation of each segment of agricultural digital processing (文丰安, 2023). Overall, scholars have conducted extensive research around the impact of the legal system on agricultural digitization, but not yet the impact of the implementation strength of the legal system on agricultural digitization, and our study provides a decision-making basis for data governance practices and enriches the literature related to the implementation effect of the legal system.
The remainder of the paper is organized as follows: Section 2 clarifies our testable hypothesis. Section 3 describes our research methodology. Section 4 discusses our main empirical results with robustness tests. Section 5 conducts transmission mechanism tests. Section 6 conducts a heterogeneity analysis. Section 7 provides a discussion. Finally, the full paper is summarized.