Does policy cognition affect livestock farmers' investment in manure recycling facilities? Evidence from China.

An increase in living standards and dietary changes have induced a rapid growth in the livestock sector worldwide, which has led to considerable environmental damages due inappropriate disposal of livestock manure. Using primary data from a field survey of cattle farmers in China, this paper empirically examines the impact of policy cognition on livestock farmers' investment in manure recycling facilities. The impact is tested through the multiple mediator model to accommodate two potential mediating mechanisms, which are the agricultural cooperative membership and land leasing. Three conclusions arise. First, policy cognition has a significant positive impact on both the diversification and amounts of farmers' investment in manure recycling facilities. Second, membership in agricultural cooperatives and participation in land leasing are two important mediating mechanisms for policy cognition to affect farmers' investment decisions on manure recycling. Finally, for the two mediating variables, leasing additional agricultural land promotes more investment in manure recycling facilities, but less in investment diversification, while cooperative membership has the opposite impact. This study contributes to three areas of literature on the factors affecting investment decisions, the mediating effects of policy cognition and the investment in non-production related assets. Regarding policy implications, we identify the importance of promoting policy awareness and agricultural cooperatives among livestock farmers, as well as developing land lease markets in agricultural regions in promoting investment in manure recycling facilities.