Pathways Toward Sustainable Dairy Production: Scale Economies and Human Capital Barriers in the Heterogeneous Adoption of Digital Technologies in China

Livestock digital technologies are pivotal to advancing sustainable agricultural development. However, their adoption rates in China’s livestock sector remain relatively low. Existing studies have largely overlooked the heterogeneous mechanisms through which herd size relates to the adoption of different types of agricultural digital technologies. Drawing on survey data from scaled dairy farms, this research employs an Instrumental Variable Probit (IV Probit) model to empirically examine the relationship between herd size and the adoption of information-intensive and knowledge-embedded digital technologies, as well as their effects on farm economic sustainability. The results indicate that herd size is positively associated with the adoption of both types of digital technologies. Further analysis reveals that herd expansion is associated with lower material and learning costs and higher sunk costs of farm-specific human capital. Moreover, the results suggest that the adoption of either type of digital technology is positively and significantly correlated with farm economic sustainability. These findings suggest that it is imperative to actively promote moderate-scale farm operations. Additionally, improving agricultural subsidy policies may promote the uptake of digital technologies to advance sustainable dairy farming.