Does Internet use reduce chemical fertilizer use? Evidence from rural households in China

Although numerous studies have explored various impacts of Internet use, few have investigated the linkage between Internet use and chemical fertilizer use in developing economies. This study examines the influences of Internet use and related promotion policy on chemical fertilizer use based on a nationwide dataset including China's 7766 rural households. The baseline regression results show that Internet use reduced chemical fertilizer use significantly. The mechanism analysis unveils the mediation role of human capital; Internet use increased farmers' human capital and then reduced chemical fertilizer use. In addition, the difference-in-difference method is employed to examine the effects of Internet promotion policy and the findings reveal that the promotion policy could help reduce farmers' use of chemical fertilizer. Finally, both propensity score matching-DID model and a two-stage instrumental variable model are used to address potential endogeneity issues associated with Internet use, and results indicate that the empirical results are robust. Our findings suggest that improving the availability of broadband access in a rural area, promoting Internet-related training and education, and more government's investment in rural ICTs infrastructure can contribute to the reduction of chemical fertilizer use.